What are FOCs and SOCs? - Economics Stack Exchange
Jan 22, 2015 · I keep seeing the terms first-order conditions and second-order conditions used in my undergrad economics class on production functions, monopolies, etc but I have no idea what these …
FOC greater than 0 - Economics Stack Exchange
Feb 28, 2023 · It's not quite possible to have "FOC greater than 0", since the FOC is a condition, not a number. What is really meant here is the derivative of the utility function.
Contradictory FOC and maximizing solution - Economics Stack Exchange
Feb 19, 2021 · FOC are \textit {necessary} for an inner optimum (can be a max or min or saddle) and SOC (often) allow to characterize the type of optimum. At the boundaries (when x go to 0 or 1) there …
A question about Lagrange multiplier (when $\lambda=0$)
A $\lambda = 0$ means that the objetive function's derivative with respect to the restriction is zero. In more intuitive terms, one cannot change the expected utility of consumption by relaxing or tightening …
FOCs for profit maximization using a transformation function
Nov 24, 2023 · I'm (still) reading the microeconomics textbook of Mas-Colell et al. On p. 135, the profit maximization problem (PMP) for producers is introduced; characterizing the ...
New-Keynesian Model: Log-linearizing the firm's FOC
Mar 24, 2015 · New-Keynesian Model: Log-linearizing the firm's FOC Ask Question Asked 10 years, 11 months ago Modified 10 years, 11 months ago
Testing for Concavity - Local Maximum & Global Maximum
Apr 7, 2023 · My question is under which contexts Negative Definitness (ND) vs Negative Semi-Definitness (ND) is required for classifying a global maximiser. And also Global vs Local. I also want …
Why is a firm's profit maximized when MC=MR? Why not stop one unit ...
May 18, 2022 · It seems that an equilibrium where MC<MR is preferred to one where MC=MR since in the case of the latter the firm still makes a profit. Put differently, why would a firm produce a unit at all …
Second Order Condition - Always means second derivative?
Apr 7, 2023 · In optimisation, does First Order Condition (FOC) always mean a condition for a max/min related to the first derivative. Similarly, is Second Order Condition (SOC), called second order …
setting of Lagrangian function - Economics Stack Exchange
Dec 20, 2020 · The general KKT theorem says that the Lagrangian FOC is a necessary condition for local optima where constraint qualification holds. When the objective function is concave or quasi …