Mathematical Methods of Economic Analysis

ECO 7405 (Fall 2011)

• Boyd's FIU Page
• FIU Econ

The most commonly used mathematical methods in economics relate to optimization problems, and this course focuses on methods of optimization.

The first part of the course develops some basic mathematical tools of analysis which we will use to solve optimization problems. This covers roughly parts II and III of the text, and may include excerpts from part VI. The second part (part IV of the text) covers classical, calculus-based methods of optimization---Lagrange multipliers and the Kuhn-Tucker theorem. The methods of Lagrange and Kuhn-Tucker have been invaluable in solving many of the problems you will typically encounter in economics (consumer and producer choice, social welfare max, etc.). The remainder of the course covers more advanced topics from Parts VII and V of the text. These include the issue of whether an optimization problem actually has a solution, and a look at economic dynamics. If time, we will look at dynamic optimiation.

Office Hours and Contact Info

Regular office hours are 12:00-1:15 and 3:00-4:00 on Monday and Wednesday. I am also available immediately after class. I will be happy to make an appointment for another time if that is more convenient. My office is DM-311A, my phone number is 348-3287, and my email is <boydj@fiu.edu>.

Class Times

The class meets Monday, Wednesday, and Friday from 2:00pm to 2:50pm in CP-103.

Textbooks

• Carl Simon and Lawrence Blume, Mathematics for Economists, W. W. Norton, New York, 1994.

Simon and Blume's book is the main text. I plan to cover Parts II-IV and VII of Simon and Blume, with some excerpts from Part VI. Time permitting, we will then turn our attention to Part V and dynamic models.

Exams and Homework

Grades will be based on two in-class midterm exams (worth 25% each), a final exam (40%), and homework assignments (10%). In addition to being announced in class, homework assignments will be posted on the class web page.

Exams

There will be two midterm exams, each worth 25% of your grade, and a final, worth 40% of your grade.

• The first midterm, covering material through Chapter 12, was given on Monday, September 26. The answers are now available.
• The second midterm, covering Chapters 13-21, was given on Wednesday, November 9. The answers are now available.
• The final will be at 12 noon on Wednesday, December 7 in CP-103.

Sample Exams

Here are some previous midterm exams from this course. Note that some questions may not be relevant.

• Exam 1
  • 2000
  • 2001
  • 2001
  • 2003
• Exam 2 (now with answers)
  • 2000-A
  • 2000-B
  • 2001-A
  • 2001-B
  • 2002-A
  • 2002-B
  • 2003-A
  • 2003-B

Homework Assignments and Answers

1. Problems 6.2, 6.3, 7.15, 7.21, and 7.28 were due on Friday, September 2. Here are the answers.
2. Problems 8.35, 9.12, 9.16, 10.21, and 11.3 were due on Wednesday, September 14. Here are the answers.
3. Problems 11.14, 12.6, 12.9, 12.15, and 12.18 were due on Wednesday, September 21. Here are the answers.
4. Problems 13.12, 13.21, 14.7, 14.12, and 14.26. were due on Friday, October 7. Here are the answers.
5. Problems 15.1, 15.7, 15.13, and 15.21. were due on Friday, October 14. Here are the answers.
6. Problems 16.2, 16.6, 17.1, 17.4, and 18.2. were due on Friday, October 21. Here are the answers.
7. Problems 18.4, 18.9, 18.13, 19.3, and 19.18. were due on Monday, October 31. Here are the answers.
8. Problems 23.5, 23.7, 23.12, 23.21, and 23.22. were due on Wednesday, November 21. Here are the answers.

Answers will be posted sometime after the homework is collected.

Tentative Schedule of Chapters

This schedule is subject to change.

Last updated: December 5, 2011 Original version: August 8, 2011