中级微观经济学第二章.pptVIP

Constrained Maximization Suppose we want to choose x1 and x2 to maximize y = f(x1, x2) subject to the linear constraint c - b1x1 - b2x2 = 0 We can set up the Lagrangian: ? = f(x1, x2) + ?(c - b1x1 - b2x2) Constrained Maximization The first-order conditions are f1 - ?b1 = 0 f2 - ?b2 = 0 c - b1x1 - b2x2 = 0 To ensure we have a maximum, we must use the “second” total differential d 2y = f11dx12 + 2f12dx1dx2 + f22dx22 Constrained Maximization Only values of x1 and x2 that satisfy the constraint can be considered valid alternatives to the critical point We must calculate the total differential of t