What to explore
Change parameters and watch the model adjust.
- Income, prices, and preference weights on the two goods
- Shock sizes for income and relative-price comparisons
Advanced microeconomics
Consumer Choice and Indifference Curves
A utility-maximization model with budget constraints, indifference curves, and demand responses to changes in prices and income.
Focus
Budget lines, tangency, and demand response
Adjust tastes, prices, and income to compare interior and corner solutions, then track how optimal bundles and indirect utility move.Core ideas
Interpret the mechanics before you chase the graphs.
- Optimal bundles balance the marginal rate of substitution against the price ratio when the solution is interior.
- Corner solutions appear when the agent is pushed to consume mostly one good.
- Demand curves emerge from repeated utility maximization under changing budgets and prices.
Learning goals
What this model should help students internalize.
- Solve the household problem under Cobb-Douglas or near-corner preference shifts.
- Interpret tangency and corner cases using budget lines and indifference curves.
- Connect parameter changes to Marshallian demand and welfare.
Prerequisites
Concepts to review before diving in.
- Price-theory equilibrium intuition
- Comfort with utility functions and constrained optimization
Next models to study
Keep moving through the track.
Advanced microeconomics
Competitive Firm and Cost Curves
Move productivity, fixed costs, and output prices to see how marginal cost, average cost, and profit-maximizing output respond.
Advanced microeconomics
2x2 Normal-Form Game
Change payoffs to see how best-response maps, equilibrium outcomes, and strategic tension shift across familiar 2x2 games.