Suits’ Watermelon Model: The Missing Simultaneous Equations Empirical Application (Stewart)December 16, 2019
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This paper extends the strategy espoused by Holmgren (2017) to employ discrete choice utility tables to teach the consumer choice model in introductory microeconomics classes. These extensions show instructors how to explain the equal marginal utility per dollar spent rule using discrete choice tables. One can also examine the more basic issue of the meaning of marginal utility and the ordinal nature of utility using these tables. This paper also provides additional tables that allow instructors to distinguish between goods that are substitutes or complements and to show why an individual may choose to not purchase a good once its price increases sufficiently. Finally, the hyperlink below provides an Excel file that allows instructors to create new tables as well as graphical overlays that instructors may use to bridge between tabular display and graphical image.
Erfle, S. (2019). Discussing Substitutes and Complements in an Economics Principles Classroom with Discrete Choice Consumer Utility Tables. Journal of Economics Teaching, 4(2), 93-115. DOI: 10.58311/jeconteach/890b037789739986ebad4279ca60940bb658cabe