Utility, Substitution and Demand

by Martin Poulter, Economics LTSN, University of Bristol

In basic microeconomics we study two different mathematical models of choice: demand curves and maximisation of expected utility. This short interactive essay explores how the two relate, by deriving a demand curve from assumptions about an individual's utility

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  1. Demand
  2. Utility
  3. A Scenario
  4. Try it out (1) Utility Maximisation
  5. Try it out (2) Change of Price
  6. Constructing the Curve
  7. Conclusion and Further Reading
  8. Epilogue: a Contrary Opinion
  9. Questions and Further Reading

This site was created in October 2001 as part of an exercise to illustrate the ease of creating Web-based teaching and learning material. An article on the basics of Web site creation for economists, based on a case study of the creation of this site, will appear in a future issue of Computers in Higher Education Economic Review (CHEER).


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