Optimal point on budget line | Microeconomics

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Optimal point on budget line | Microeconomics | Khan Academy

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Using indifference curves to think about the point on the budget line that maximizes total utility
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Пікірлер: 45

@brandengomez4229 4 жыл бұрын

I want to know how to mathematically find that optimal point using the prices given not just know where it is, why would you leave out the most important part

@cindyhosiani8080 4 жыл бұрын

Yup.. i came to this video hoping to get that explanation too

@abhinavsahu6440 3 жыл бұрын

find the slope of the budget line and equate it to the derivative of the indifference curve to obtain a differential equation, then solve the equation to find the equation of indifference curve . using both the equations you can easily find the point of intersection.

@FishersofMenLeague 8 жыл бұрын

the optimal point is where the indifference curve and the budget line intersect (aka the derivative of the indifference curve)

@bluc3cl0ud 12 жыл бұрын

I don't understand at 7:53 when he writes the quantity of fruit at two different prices. I think he is listing the price and its correspondent quantity at two different optimal points when we change the price of fruit, so when the price is $2, its quantity must be about 4 (not 8) for optimal point, isn't it???

@gdogvibes1 12 жыл бұрын

When the indifference curve hits the Budget Line, It creates "equilibrium points" where the Marginal Utility is not increasing or decreasing.

@IJmackdaddy 11 жыл бұрын

a curve or set of curves on the same consumption space (graph) that represent combinations of goods that are equal in utility. the reason it's called an indifference curve is because the consumer would be indifferent to consuming any of the bundles on the curve....i hope that made some sense

@Shoppahaulicc 8 жыл бұрын

ok but calculating the point of tangency....? you just blanket over it and discuss the idea of it

@Borzacchinni 7 жыл бұрын

set/find MRS=MRT

@barovierkevinallybose1040 5 жыл бұрын

"Discuss": Marginal Utility (partial derivative) with respect to x divided by Marginal unity with respect to Y, set equal to the relative price of X to Y, then solve. [(MUx/MUy)=(Px/Py)]

@PSYCHOSTORM32 10 жыл бұрын

I still dont know exactly where the optimal point is on the budget line

@michaelwang4463 9 жыл бұрын

PSYCHOSTORM32 me too

@DamoIsKeen 9 жыл бұрын

PSYCHOSTORM32 where the indifference curve is tangent to the budget line.

@bigfriki 9 жыл бұрын

***** Aha, but if there really are infinite indifference curves on the diagram (as he and my study book say), there should also be infinite points along the budget constraint line to which one IC is tangent to. Please can somebody explain this??

@yashchandak 9 жыл бұрын

bigfriki you first need to know the properties of IC curve( indifference curve). one of the properties says that no two indifference curve can intersect within the quadrant. so due to this property (i think) there can't be 2 IC curves which are tangent to a budget line. :)

@bigfriki 9 жыл бұрын

yash chandak Yeah, you're absolutely right. I also ended up understanding it. The cue is that everyone has their own valuation of the two goods. Once that is decided, the ICs can't cross. Very right sir. :)

@MrKobe726 9 жыл бұрын

if i have an utility function and a utility level, how should i calculate the optimal point?

@k.obrien8043 9 жыл бұрын

Can you do a video on these topics!!! Endowment Effect, Prospect theory. I love these videos, they are a huge help :)

@gauravupadhyay5410 9 жыл бұрын

something is missing..you didn't explain indifference curves and jumped onto this..

@EDMango 8 жыл бұрын

+Gaurav Upadhyay he did, its an series of videos, so it's in the revious video

@ilikeitsmall 8 жыл бұрын

+EDMango nope he did not

@sizosimelane 8 жыл бұрын

Next video.

@sarah214ahmed 4 жыл бұрын

perfect! thanks a lot

@annapilon524 6 ай бұрын

how did you determine where to draw the indifference curve though?

@Bomber103378014 7 жыл бұрын

so helpful man. thanks a lot.

@Heirl00m 12 жыл бұрын

Hey KhanAcademy - Could you upload more videos about French history?

@nip473 3 жыл бұрын

Gold Standard Education.

@tnmpro4330 2 жыл бұрын

Thank you very much...!

@xiafeicen2489 9 жыл бұрын

The first optimal point, why is 2 and 8,not 2 and 5? Last slide

@kobe24OBCity 9 жыл бұрын

yea ur right

@ayxanosmanl6197 7 жыл бұрын

xiafei cen actually, his teaching method is good, however, he teaches wrong things :D

@OnlyXfox 12 жыл бұрын

you really are a smart man, thank you!

@dosty9491 2 жыл бұрын

Thanks buddy

@paulpaturel3982 6 жыл бұрын

budget line definies the feasible set ?

@BangaruAmarnath 7 жыл бұрын

Indifference curve is first introduced in which video?

@bluc3cl0ud 11 жыл бұрын

thanks, though! ^^

@amitagrawal5192 5 жыл бұрын

not a good way of representation...........not understand well

@rhystucker1673 11 жыл бұрын

eh, i'm not too fussed about whether or not i know

@ScottKAR 12 жыл бұрын

chocolate>fruit

@IJmackdaddy 11 жыл бұрын

how so? doesnt help me much if you just say wrong lol

@bigfriki 9 жыл бұрын

If there are infinite indifference curves, there also should be infinite optimums... ¬¬ This theory really contradicts itself pretty badly... can't believe noone's ever corrected this. Facepalm.

@batmanwayne6078 7 жыл бұрын

bigfriki corresponding to 1 indifference curve and budget line there is a single Optimal point, not infinite. although when we have infinite budget line corresponding to infinite indifference curves , then we can have infinite Optimums. I don't see how that's a contradiction