section6_brian - 1 Section Notes Week 6 Outline Key...

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Unformatted text preview: 1 Section Notes Week 6 Outline Key Concepts Announcements: OH, Problem Set Conservation Technology Maximization: little review Diffusion Questions on club goods Intellectual Property Rights (IPR) Tech adoption Contingent Valuation Economic Maximization For those not too familiar with optimization, I thought I might detail the process I use: Step 1: Set up the objective function. Identify the choice variable(s). For almost all cases in this class, the objective being maximized will be profit. The choice variable is usually how much to produce, Q , but may be other things too. Sometimes a choice (variable) is dichotomous: this or that, on or off. For profit, remember: Profit = Revenue - Costs + Subsidy Payments - Tax Payments Step 2: Write down the First Order Conditions (FOCs). Take the first derivative of the objective function with respect to (w.r.t) the choice variable(s) and set equal to zero 1 ....
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This note was uploaded on 09/24/2011 for the course ECON C125 taught by Professor Zelberman during the Spring '09 term at University of California, Berkeley.

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section6_brian - 1 Section Notes Week 6 Outline Key...

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