Utility Maximization and Consumer Choice

INTRODUCTION

Today we will learn about the theory of consumer choice and utility maximization. For extra-help on this topic try using this study guide.

TODAY'S LECTURE (Hopkins 2.0)

HOMEWORK

Assignments

1. Read: Krugman (Module 51).

2. Watch: The video lecture for today's topic (linked above).

3. Optional: The videos linked below.

   • Adam Smith's Diamond-Water Paradox and Utility

   • Marginal Utility

   • Demand and Marginal Utility

   • Utility Maximization (Problem #1)

   • Utility Maximization (Problem #2)

ASSESSMENTS AND ACTIVITIES

Formative Assessment (MCQ's): You will take a formal assessment during class. The assessment will consist of multiple-choice questions and one FRQ from an old AP Exam. Doing the problem of the day and ensuring that you understand it will help you prepare for today's formative assessment and help to ensure that you understand the concepts in this lesson.

Problem of the Day: Study Question #4 on page 370 (end of chapter 19) in McConnell and Brue.