Course Details

Subject {L-T-P / C} : HS1345 : Optimization Theory in Economics { 3-0-0 / 3}

Subject Nature : Theory

Coordinator : Prof. Bikash Ranjan Mishra

Syllabus

Unit – 1
Functions: Notations Types Break-even Analysis Limit of a function: Properties of Limits, Some Standard Limits, One-sided Limits Continuity of functions and its properties.
Unit – 2
Derivative (Differential Coefficient) of a Function Rules of Differentiation Derivatives of Logarithmic and Exponential Functions Increasing and Decreasing Functions, Convex and Concave functions, Maxima and Minima Applications in Marginal Analysis, Point Elasticity of a Function, Revenue, Cost and Profit Applications.
Unit – 3
Partial Derivatives Total Differential, Chain Rule, Maxima and Minima of functions of two variables, Lagrange’s Multipliers and Constrained Optimization Applications of partial derivatives in Business and Economics – Marginal Analysis, Elasticity of Substitutions, Unconstrained and Constrained Bivariate and Multivariate Optimization.
Unit – 4
Indefinite and Definite Integral: Rules and Techniques Applications to Marginal Analysis, Maximizing Sales and Profits over Time, Consumer’s and Producer’s Surplus, The Learning Curve, Investment and Capital Formation.
Unit – 5
Linear Programming – Graphic and Simplex Methods Primal-Dual Optimal Solutions Non-linear Programming – Kuhn-Tucker Condition and its economic interpretations Introduction to Dynamic Programming.

Course Objectives

Course Outcomes

On successful completion of the course, students will be able to: <br />1. Identify and understand the rationale of optimization techniques as a mathematical model <br />2. Apply the techniques of optimization in Economics, Business, and Finance <br />3. Assess the importance of calculus application in understanding fundamentals of Micro and Macroeconomics laws and theories

Essential Reading

Supplementary Reading