Matematické metody v ekonomii
Week 1
Lecture (February 21)
Contents
Today we talked about the consumer behaviour and the ways to analyze it. For that purpose we formally setup the maximization problem that consists of the objective functiion (utility of the agent) and the budget constraint. We showed that under certain conditions the Kuhn-Tucker conditions for maximum with inequlity constraints are equivalent to ordinary first-order conditions of the maximization problem with equality constraints. We further gave a formal definition of the equilibrium in the problem considered.
On the exercise session we solved the maximization problem, depicted the solution graphically, defined the equilibrium, derived price and wealth effects.