Mathematics for Economists

(Greg DeLong) #1

Constrained positive deÖnite matrixes


Ifx 1 =x 2 = 1 /

p
2 thenλ= 1 /

p
2

A=






p
2 0
0

p
2




,B=





2 /


p
2 , 2 /

p
2




,H=


0


@


0


p
2

p
p^2
2

p
p 2 0
2 0

p
2

1


A


det(H)= 4

p
2 .As there are two variables this is the condition for local
maximum, so




p^1
2 ,
p^1
2




is a local maximum.
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