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 · A hint suggested to find take the FOC, and then set $x = 0$ and I would see that FOC is greater than 0, meaning that $x = 0$ cannot possibly be a utility maximizing choice, and the …
Contradictory FOC and maximizing solution - Economics Stack Exchange
Feb 19, 2021 · FOC are given as - x 1−x x 1 x = (p2/p1)2r/2r−1 (p 2 / p 1) 2 r / 2 r 1 My problem is - Whenever p1 p 1 > p2 p 2, FOC argues that value of x should be < 1/2 but this doesn't maximize the …
FOCs for profit maximization using a transformation function
Nov 24, 2023 · Usually when you do constrained optimization under inequality constraints, you get inequalities for the FOCs as well (e.g. (5.C.2) on p. 137, where the authors study the important …
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 …
Deriving the Euler Equation - Economics Stack Exchange
Sep 4, 2015 · Now to get the Euler equation: If you take the derivative of that with respect to K_t+1 you will get your FOC there. (This is the FOC for the whole Lagrangian, because the derivative of U (C) …
Externalities - First order conditions - Economics Stack Exchange
Dec 1, 2016 · The optimization problem is My question is how did they arrive at those FOC's? UPDATE:The second part of this optimization is to look at the problem from firm 1 perspective, it …
A question about Lagrange multiplier(when $\\lambda=0$)
The solution to this problem gives the following first order condition (FOC) i.e. taking derivative w.r.t. Φ Φ (assuming integration and differentiation can be exchanged): But there's actually a constraint: ϕf …
Utility function of habit formation model - Economics Stack Exchange
Could you tell us a bit more about your model? Is this infinite horizon or are there finitely many periods? What are yo trying to maxmimize with the FOC? It looks like, if you were maximizing the lifetime …