Utility Maximization in a Nutshell

**November 2003**

**Sanjay Paul**

Associate Professor of Economics

119 Nicarry Hall

Elizabethtown College

Elizabethtown, PA 17022

tel: (717) 361-1543

email: pauls@etown.edu

**Description**

We have developed three interactive online exercise sets designed to complement
the treatment of utility maximization in principles textbooks. These exercises
require students to select values for parameters, draw budget constraints and
indifference curves, solve equations, and obtain optimal consumption levels.
Furthermore, students are required to change parameter values and conduct comparative-statics
exercises. These exercises are designed to enhance the students' grasp of basic
concepts in utility theory, their ability to perform arithmetic calculations,
and engage in economic reasoning.

Exercise 1: Budget Constraint

Exercise 2: Indifference Curves

Exercise 3: Utility Maximization

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Prepared for the Midwest Conference on Student Learning in Economics: Innovation,
Assessment and Classroom Research, Akron, Ohio, November 7, 2003.