Building a Taylor Rule Using FRED (Mendez-Carbajo, Taylor & Bayles)June 21, 2017
In many principles of microeconomics courses, the concept of consumer choice is not covered due to its complexity. However, this severely limits students who plan to enroll in an intermediate microeconomics course in the future. This paper offers a strategy for teaching consumer choice through indifference curves to these introductory students. Introducing this material in a principles course will aid the students’ comprehension when they are later enrolled in an intermediate microeconomics course. Converting a continuous indifference curve map into a discrete form allows students to see consumer choice from a different angle. After students understand this discrete form, the instructor may demonstrate the relationship to income and substitution effects.