Illustrating Consumer Theory with the CES Utility Function


Publication: Journal of Economic Education

Volume: Volume 35, No. 3

Issue: Summer 2004

Pages: 251-258

Author(s): Soumaya M. Tohamy (Emory University) and J. Wilson Mixon Jr. (Berry College)

Address (Principal Author):Soumaya Tohamy
Assistant Professor of Economics
Department of Economics
Emory University
Atlanta, GA 30322-2240
Phone: (404) 727-3320
Fax: (404) 727-4639

Internet Address (Principal Author): stoha01@emory.edu

Title: Illustrating Consumer Theory with the CES Utility Function

Abstract: The authors use Microsoft Excel to derive compensated and uncompensated demand curves. They uses a constant elasticity of substitution (CES) utility function to show how changes in a good's price or income affect the quantities demanded of that good and of the other composite good. Excel's "Solver" is used to show these changes.



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