Mathematically Solving for the Income and Substitution Effect of a Price Change

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Mathematically Solving for the Income and Substitution Effect of a Price Change

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5 жыл бұрын

This video uses a numerical example, involving consumer utility maximization, to find the income and substitution effect of a price change. A graph and table are provided to help in understanding the mathematical details.
At approximately 7:41 in the video, I misspoke: I meant to say that with a normal good, you will buy less of it as income decreases.
A different example is here: • Mathematically Solving...

Пікірлер: 46

@Bethlehem0BC 5 жыл бұрын

Never thought the perfect youtube tutorial could exist. Perfect structure and explanations. Thank you

@austinaune2589 5 жыл бұрын

Econ 10a ucsb?

@parkerfrancisgauthier7360 3 жыл бұрын

I remember asking my micro professor for help on IE and SE. His conclusion to me was "you're overthinking it." I probably was, but your video was leagues more helpful. Wish I knew this existed then!

@dylangranum5838 4 жыл бұрын

online micro with calc just became a lot easier. thank you.

@elinadas74 3 жыл бұрын

Thank you so much! Clear and concise explaination. Cleared up my doubts completely.

@sjaoenvf 5 ай бұрын

the math of the utility function really helps to understand these effect. Thank you.

@Orochimaru500 9 ай бұрын

I understood everything u have done. But that was because of your pure explanation. Thanks Sir.

@cherisejanari8661 4 жыл бұрын

Thank you for that simple and very enlightening explanation.

@akankshap8649 3 жыл бұрын

your method of explaining this concept is perfect,it clear my all doubt thanks.

@migueru1464 7 ай бұрын

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@shivamkumartiwari6545 Жыл бұрын

Now I become your new subscriber. You teach very effectively. Thanks

@EconomicsinManyLessons Жыл бұрын

I appreciate that!

@dinacamalia7256 2 жыл бұрын

Thank you sir for the very clear and simple explanation. Great video sir 😊

@thenozar7603 3 жыл бұрын

Alright alright alright Mr Matthew Mcconaughey, thanks for the great video

@beomkomap 3 жыл бұрын

Thank you sir! very helpful.

@orey643 Жыл бұрын

this guys goated

@EconomicsinManyLessons Жыл бұрын

Thank you!

@meloney55 3 жыл бұрын

thank you so much, it was really helpful!!!!

@ekonomiaklassroom2442 3 жыл бұрын

So nicely explained, thank you so much sir

@GraysonWheeler-ll9hh Жыл бұрын

Thank you!

@EconomicsinManyLessons Жыл бұрын

You are very welcome!

@marcosporras6547 3 жыл бұрын

Thank you so much, professor

@teddy6347 2 жыл бұрын

Thanks！It helped a lot！

@nopchannnuon8776 3 жыл бұрын

Very Good job!

@mosessilungwe4090 4 жыл бұрын

Suppose that the price of good X increases as is the case in the video. Calling the budget W (the budget is unknown), how would you solve x and y under the new prices as a function of W ( the unknown budget).

@elvinkarimli7690 Жыл бұрын

Did you find the answer? )

@shafeeinsyed4263 10 ай бұрын

thank you so much for this video, really explained everything in detail

@EconomicsinManyLessons 10 ай бұрын

My pleasure. Thank you for the nice comment.

@FullShadowGaming 3 жыл бұрын

Lifesaver

@senthamizhvithagan2023 3 жыл бұрын

I have a doubt.can be the income effect work alone without substitution effect??

@gracebwakya5493 3 жыл бұрын

Thank you

@jonasf7498 3 жыл бұрын

big thanks!!!

@frankconte9869 2 жыл бұрын

Thank you.

@EconomicsinManyLessons 2 жыл бұрын

You are welcome!

@simonedisalvatore6832 3 жыл бұрын

thank u very much sir !

@EconomicsinManyLessons 3 жыл бұрын

You are welcome!

@canzonibelle8844 2 жыл бұрын

I don't understand why at 06:05 he plugs 5X into the equation...

@aymanmasud831 2 жыл бұрын

Because when the price of good x increased to 10, you plug it into the budget constraint equation. from that he got y=5x. And I'm pretty sure we hold utility constant. Thus, set the Utility equal to the initial utility. Hope that helps

@mrsoumikghosh5900 Жыл бұрын

but this is hicks substituition effect

@Re-BornFree 9 ай бұрын

Yes, that's what I've been telling myself all along but for unknown reasons the Hicks method is more understandable than than Slutsky.

@emreyaln7780 Жыл бұрын

LET HIM COOK!

@mateusmurta9447 2 жыл бұрын

thanks a lot

@pearldamptey5390 7 ай бұрын

Hii

@BalticDude_DCS 3 жыл бұрын

What a terrible video. First of all your arithmetic is terribly confusing and inefficient, and then you tell us that, "A normal good is something you buy less of as your income goes up" I understand they are opposite when referring to income and substitution effects, but you need to explain that. A dislike from me.