In this module, students will continue to develop the mathematical background necessary to cope with intermediate economic theory and intermediate econometrics. The core theme covered is the optimization of quantities (such as profit, utility, cost, social welfare, or likelihood) which depend on several variables that may have to satisfy constraints. Optimization theory and techniques underlie the workings of the entire subject area of economics. The main topics covered are: unconstrained optimization, numerical optimization, optimization with equality constraints, dynamic optimization, optimization with inequality constraints.

By the end of the module students should be able to:

• demonstrate knowledge and critical understanding of the most fruitful methods of optimization;
• identify and apply these methods logically and accurately;
• demonstrate knowledge and critical understanding of how the principles and techniques of optimization are useful in various applications in economics.