9887

Consumer Choice: Income, Tastes, and Prices

A fundamental issue in microeconomics is the explanation of how consumers allocate limited incomes to the purchase of different goods and services. The microeconomic theory of consumer behavior assumes that changes in incomes, tastes, prices, and other variables may affect the consumption equilibrium. Changes in income or prices affect the budget constraint. Changes in preferences affect the utility function. Many students find it difficult to visualize such changes. This Demonstration examines the influences of such changes for three common types of utility functions, Cobb–Douglas preferences, perfect substitutes, and perfect complements. The contour plot shows the effects of parameter variations on the consumer's indifference curves, and the surface plot shows the effects on the corresponding utility surface.

SNAPSHOTS

  • [Snapshot]
  • [Snapshot]
  • [Snapshot]
    • Share:

Embed Interactive Demonstration New!

Just copy and paste this snippet of JavaScript code into your website or blog to put the live Demonstration on your site. More details »

Files require Wolfram CDF Player or Mathematica.









 
RELATED RESOURCES
Mathematica »
The #1 tool for creating Demonstrations
and anything technical.
Wolfram|Alpha »
Explore anything with the first
computational knowledge engine.
MathWorld »
The web's most extensive
mathematics resource.
Course Assistant Apps »
An app for every course—
right in the palm of your hand.
Wolfram Blog »
Read our views on math,
science, and technology.
Computable Document Format »
The format that makes Demonstrations
(and any information) easy to share and
interact with.
STEM Initiative »
Programs & resources for
educators, schools & students.
Computerbasedmath.org »
Join the initiative for modernizing
math education.
Step-by-step Solutions »
Walk through homework problems one step at a time, with hints to help along the way.
Wolfram Problem Generator »
Unlimited random practice problems and answers with built-in Step-by-step solutions. Practice online or make a printable study sheet.
Wolfram Language »
Knowledge-based programming for everyone.
Powered by Wolfram Mathematica © 2014 Wolfram Demonstrations Project & Contributors  |  Terms of Use  |  Privacy Policy  |  RSS Give us your feedback
Note: To run this Demonstration you need Mathematica 7+ or the free Mathematica Player 7EX
Download or upgrade to Mathematica Player 7EX
I already have Mathematica Player or Mathematica 7+