Comparative Statics With Constraints
A generalization of the above method allows the optimization problem to include a set of constraints. This leads to the general envelope theorem. Applications include determining changes in Marshallian demand in response to changes in price or wage.
Read more about this topic: Comparative Statics
Famous quotes containing the words comparative and/or constraints:
“That hour in the life of a man when first the help of humanity fails him, and he learns that in his obscurity and indigence humanity holds him a dog and no man: that hour is a hard one, but not the hardest. There is still another hour which follows, when he learns that in his infinite comparative minuteness and abjectness, the gods do likewise despise him, and own him not of their clan.”
—Herman Melville (1819–1891)
“The analogy between the mind and a computer fails for many reasons. The brain is constructed by principles that assure diversity and degeneracy. Unlike a computer, it has no replicative memory. It is historical and value driven. It forms categories by internal criteria and by constraints acting at many scales, not by means of a syntactically constructed program. The world with which the brain interacts is not unequivocally made up of classical categories.”
—Gerald M. Edelman (b. 1928)