Utility Maximization Activity

Grade Levels
9th - 12th
Formats Included
  • PDF (8 pages)
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Are you looking for an engaging lesson that gives your students an opportunity to evaluate how consumers make purchases with an income constraint? Do you need an activity that provides your students an opportunity to put principles into practice by calculating the marginal utility per dollar of two goods and determining the utility maximizing combination of goods to buy? This is the activity you've been looking for!

This activity includes:

1) This "Utility Maximization" Activity includes 2 parts. It begins with a detailed flowchart and synopsis of the process by which consumers choose the utility maximizing combination of goods when faced with an income constraint. Using examples provided, students will be taken through the steps to calculating the marginal utility per dollar for every unit of a good and then evaluate how to spend a limited income to maximize utility. Next, students will have the opportunity to put principles in practice and make the utility maximizing decisions themselves. Using 6 separate examples, students will analyze the marginal utility for each unit of two separate goods and use the price of the products and their marginal utility to calculate the marginal utility per dollar per unit. Then, students will decide, one by one, how many units of each good should be purchased until all disposable income is spent and utility has been maximized. Students will have to critically think to answer questions as to how consumer decision-making and purchases will change if product prices and income level change.

This activity can be used in many different ways in the classroom. Students can work independently, in pairs or this activity can be used as a jigsaw in order to facilitate a class wide discussion about the topics discussed in the activity.

2) A detailed answer key to the lesson activity to save you time and help guide student comprehension.

This activity can also be found in a bundle paired with a PowerPoint, Keynote and PDF version of a fully customizable lecture found here:

Marginal Utility Bundle

If you like this activity, check out our Unit Activity Bundle that includes activities for all of the objectives in this unit.

Theory of Consumer Choice Unit Activity Bundle

Best of all, this activity aligns to our "Unit 2.2 - Utility Maximization" video lecture, which can be found here:


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Total Pages
8 pages
Answer Key
Teaching Duration
1 hour
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