Applied Microeconomics: Utility Functions and Optimization

Microeconomics is essential for understanding markets, but the mathematical foundation of consumer behavior often feels abstract. This course breaks down the core concepts into clear, actionable, text-based explanations and problem-solving practice. By the end of this course, you will be proficient in applying mathematical models—specifically utility functions and budget constraints—to predict and explain consumer choices and analyze the effects of economic policy. What you'll learn: * Understand foundational microeconomic concepts, including scarcity, opportunity cost, and the definition of rational consumer choice. * Analyze and graph budget constraints, calculating how changes in prices and income shift consumption possibilities. * Master different types of utility functions (Cobb-Douglas, perfect substitutes, perfect complements) and interpret indifference curve maps. * Apply algebraic techniques to solve utility maximization problems and derive individual demand curves. * Practice calculating income and substitution effects resulting from price changes. * Analyze consumer welfare and evaluate the impact of basic microeconomic policies like taxes, subsidies, and price controls. The course begins with foundational definitions and graphical analysis before progressing to algebraic and calculus-based techniques for solving optimization problems. We conclude by applying these tools to evaluate basic microeconomic policy interventions. This course is designed for absolute beginners interested in economics, business, or policy analysis. No prior knowledge of microeconomics is required, though basic high school algebra is helpful. Start building your foundational microeconomic toolkit today.