microeconomics3070profbarham

microeconomics3070profbarham内容摘要：

poster, size of freshman class  Factors not in your model:  Content of poster, placement of poster, relative size of poster  Are there any constraints to this model?  the amount of budget you have to spend on poster advertising. Types of Variables in a Model Exogenous Variable: one whose value is taken as given in a model. Endogenous Variable: one whose value is determined within the model being studied Which factor(s) would have you taken as given in the poster example?  Price, size of freshman class (exogenous) Which factor(s) are determined by your model?  The quantity of posters needed (or demanded) Tools of Microeconomic Analysis 1. Constrained Maximization 2. Equilibrium Analysis 3. Comparative Statics Constrained Optimization Constrained optimization: an analytical tool used when a decision maker seeks to make the best (optimal) choice, taking into consideration possible restrictions on the choice. Constrained Optimization This tool has two parts: 1. Objective function: is the relationship the decision maker seeks to optimize (maximize or minimize). 2. Constraint: limits or restrictions that are imposed on the decision maker Constrained Optimization Examples You want to maximize your happiness during your second year at CU.  Objective function Utility (happiness): Utility=f(days skied per month (s), beers per week(b)). U=s*b  The thing you are maximizing or minimizing  Constraints: . (subject to) Ine (I)=S*Ps+B*Pb, where P is price  Many max or min problems have some kind of a constraint you have to work with Writing Out Statement of Constrained Optimization Problem M A Xs , bU = s * bs . t I = s * P s + b * P bObjective Function Endogenous Variables Constraint。