A.8 Consumption duality | Consumption - Microeconomics

[@SEOandContentMarketing]

Explained more in 5 minutes than my professor in 3 lectures. Here's a sub!

[@Policonomics]

Welcome to our community! 😘🅿

[@Dem0niccA]

Mine in a whole semester gets confused cannot explain

[@motivationmirth]

😀😀😀

[@NerdJake]

This video saved my ass while I was doing my bachelor's degree and now I'm preparing for an exam doing my masters and I'm back on this video. Absolutely amazing! I love it!

[@theaj1nkya]

Absolutely amazing 👏🏻 1 video to prepare for the entire exam.

[@Policonomics]

This video shows how useful a good understanding of consumption duality can be. Starting with utility maximisation and cost minimisation, this video explores everything you need to understand about consumer theory. We also explain formulas such as Roy's identity or the Hotelling/Shephard lemma. A.8 Consumption duality | Consumption - Microeconomics Learn, and enjoy!

[@mehrabsattar9712]

was looking for hours, this one video cleared up so many concepts. thanks!

[@anujmishra9077]

Thank You so much for this video. However, I think there should be a positive sign in Shephard's Lemma instead of a -ve sign (4:52)...

[@mehzabinakterkazal5236]

Thanks to the infinity for this video. Clean, precise, to the point. 💜

[@revolutionarydefeatism]

I’m eagerly looking forward to other videos and the examples. Thank you.

[@mrmm1797]

There are a couple more errors and omissions, in addition to what was pointed out by others, in this video worth pointing out: 1) At 0:53 when you mention "x" as a good. "x" is NOT a good. Rather, it is a vector of all the goods that the consumer can consume. Given that you're in 2 space (i.e. 2 dimensions), "x" is referring to the vector containing x1 and x2. By extension, "p" is not the price of good "x". Rather, "p" is the price vector of all the goods that consumer can consume. Given that we're in 2 space, "p" would be referring to the vector containing p1 and p2. This is how it should be explained because in reality consumers face more than 2 goods. 2) At 1:42 when you label the blue-coloured curve as the utility function. This is actually the indifference curve. Many people make this mistake. The utility function is NOT the same thing as an indifference curve. One indifference curve shows you all the possible combinations of, in this case, x1 and x2, that provide the same level of utility to the consumer. Furthermore utility functions are not assumed to be convex functions. They are rather assumed to be quasi-concave (or even strictly quasi-concave) to precisely illustrate the effect of diminishing marginal utility with respect to a particular good. The consumer selects the combination of, in this case, x1 and x2, given prices, p1 and p2 and income, m, such that the indifference curve is tangential to the budget constraint. NOT the utility function being tangential to the budget constraint. 3) At 3:45. Although the Slutsky equation relates, what should rather be labelled, the Walrasian demand function (and not the Marshallian demand function) to the Hicksian demand function, you should really mention that you're getting the gradient of the Walrasian demand function equalling the gradient of the Hicksian demand function less the product of the Walrasian demand function (differentiated with respect to income), and the originally demanded quantity of xi (which you have labelled as xj). However, xj in the Slutsky equation can represent the Hicksian demand function via Shephard's lemma, bearing in mind 1) Walras' Law holds which means that expenditure must equal income and 2) that the Hicksian demand evaluated at initial prices and initial utility coincides with the Walrasian demand curve evaluated at initial prices and wealth.

[@Dem0niccA]

Finally woman!! Direct explanation.. Thank U!

[@Policonomics]

Thank you for watching! 😀🅿

[@NotSoDeepBro]

Shepard's Lemma isn't negative is it? Just the partial derivative of the cost function with respect to price of good 1.

[@christophertang8696]

Many thanks for the video, this really helped a lot!

[@rodneyturkson918]

great videos ! but prctical examples at the end of the videos would be great

[@Policonomics]

Hi +Rodney Turkson , Thanks! Regarding the examples: we always try to keep videos short and simple. However, we plan in the future to make additional videos with examples, one per subject. Best, The Policonomics Team

[@shaziaimam1610]

this video is perfect. thank you.

[@sarunsrikhom2021]

Thanks for very very good content !!!!

[@ashishdhungana633]

Love the vedio. Also Like to get the explaination of 'Lancasterian theory of attributes' with figures

[@Policonomics]

Thank you! 🙂 The characteristics demand is explained in our A.13 video. Here's the link kzbin.info/www/bejne/rn6sd5WLYqeVaNk ❤

[@IT-wm6hm]

Great video!

[@sulaimanqizilbash4248]

Can you suggest some books or websites with good and rigorous mathematical examples?

[@AloofMusician]

What does it mean by rearranging to get expenditure function from indirect utility function?

[@Policonomics]

Hi +FatPanda , It basically means that, since duality implies analysing two sides of a coin, it is easy to go from one to the other. When you reach the optimum value, you can rearrange the formulas to get the cost function from the indirect utility function. Thanks for watching! The Policonomics Team

[@UIV13]

Dont get confused. It just means that by solving the idirect utility function for m you get the cost function, or by solving the cost function for U(Constant) you get the indirect utility function

[@FlywithZahanat]

Very well explained

[@MichaelANyanda]

The hotelling/Shephard's Lemma formula is positive has no negative

[@TA-ps2vj]

You beautiful person! Many thanks

[@Policonomics]

Thank you for watching! 😍🅿

[@tadasvaitkevicius5799]

i cant say i like it, but it the beggining it was very useful, later i think it was to much as to fast