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University of Exeter Business School

Optimisation Techniques for Economists

Module titleOptimisation Techniques for Economists
Module codeBEEM103
Academic year2023/4
Module staff

Dr Szabolcs Deak (Convenor)

Duration: Term123
Duration: Weeks




Number students taking module (anticipated)


Module description


Optimising behaviour is at the core of most economic analysis. Whether we ask how a consumer should behave, how firms should compete in a market or how governments should decide on their monetary policy, the ability to solve optimisation problems is key to finding an answer. This module provides a thorough introduction to the techniques involved in unconstrained and constrained optimisation. It expands on the optimisation techniques introduced in the microeconomics and macroeconomics courses in the first term and lays the foundation for many advanced economic option courses in the second term.

Additional Information:


Microeconomics is relevant across countries as it is based on mathematical models.


All of the resources for this module are available on the ELE (Exeter learning Environment).


This module equips students with logical thinking, numeracy and writing skills, as well as an understanding and theoretical knowledge of economic issues. These help students think like economists, a quality highly valued by employers.



Module aims - intentions of the module

Economic problems are often expressed using mathematical models which are to be formulated, analysed and to be confronted with real-world data. The module aims to make you familiar with those mathematical tools and methods which are used frequently in most economic models and to demonstrate how they are applied.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

  • 1. Demonstrate the skill to differentiate functions in several variables
  • 2. Demonstrate the ability to solve economic optimisation problems

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

  • 3. Explain the important role of mathematical tools in economics and related disciplines in a global setting
  • 4. Apply essential skills to analyse models from microeconomics and macroeconomics
  • 5. Demonstrate familiarity with concepts of linear algebra that are essential for econometrics

ILO: Personal and key skills

On successfully completing the module you will be able to...

  • 6. Demonstrate numeracy and the ability to handle logical and structured problem analysis
  • 7. Present written and quantitative data effectively
  • 8. Demonstrate independent learning and time management
  • 9. Demonstrate inductive and deductive reasoning

Syllabus plan


  • Univariate functions and their properties, differentiation of univariate functions, unconstrained univariate optimisation
  • Multivariate functions and their properties, differentiation of multivariate functions, unconstrained multivariate optimisation and applications
  • Constrained optimisation and applications, the Lagrange multiplier method, the Kuhn-Tucker theorem
  • Infinite horizon constrained optimisation problems

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Scheduled learning and teaching activities22Lectures
Scheduled learning and teaching activities11Tutorials
Guided independent study117 Reading, preparation for classes and assessments

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
Tutorial exercisesVarious1-9Verbal
Problem sets (homework)3 problem sets with 3 questions each1-9ELE

Summative assessment (% of credit)

CourseworkWritten examsPractical exams

Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
Examination702 hours1-9Written
Problem set 110Week long window for 3 questions1-9ELE
Problem set 210Week long window for 3 questions1-9ELE
Problem set 310Week long window for 3 questions1-9ELE

Details of re-assessment (where required by referral or deferral)

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
Examination (70%)Examination (70%)1-9August/September reassessment period
Problem set 1Problem set 1 (10%)1-9August/September reassessment period
Problem set 2Problem set 2 (10%)1-9August/September reassessment period
Problem set 3Problem set 3 (10%)1-9August/September reassessment period

Indicative learning resources - Basic reading

Essential reading:

  • Knut Sydsæter, Peter Hammond, Arne Størm, and Andrés Carvajal (2016): Essential Mathematics for Economic Analysis, 5th edition, Pearson

Optional reading:

Alternative textbooks covering the same topics. You may find some more accessible than our main textbook:

  • Carl P. Simon and Lawrence Blume (2010): Mathematics for Economists, International student edition, W. W. Norton
  • Ian Jacques (2015): Mathematics for Economics and Business, 8th edition, Pearson
  • Teresa Bradley (2013) Essential Mathematics for Economics and Business, 4th edition, Wiley
  • Kevin Wainwright and Alpha C. Chiang (2005): Fundamental Methods of Mathematical Economics, 4th edition, McGraw-Hill

More advanced textbooks for the interested reader:

  • Knut Sydsaeter, Peter Hammond, Atle Seierstad, and Arne Strøm (2008): Further Mathematics for Economic Analysis, 2nd edition, Pearson
  • Avinash K. Dixit (1990) Optimization in Economic Theory, 2nd edition, Oxford University Press. A superb text on optimization, but out of print and it has always been very expensive
  • Daniel Leonard and Ngo van Long (1991): Optimal Control Theory and Static Optimization in Economics, Cambridge University Press

Indicative learning resources - Web based and electronic resources

  • ELE – College to provide hyperlink to appropriate pages

Indicative learning resources - Other resources


Key words search

Optimisation, Economic Problems, Optimisation Problems, Optimisation Techniques

Credit value15
Module ECTS


Module pre-requisites


Module co-requisites


NQF level (module)


Available as distance learning?


Origin date


Last revision date