Chapter 7: Consumer Surplus, Producer Surplus and the Efficiency of Markets - Part 2

[@Hedgehog833]

For some reason I'm 100% a visual learner and need to see not only the numbers but also the person teaching. you have the perfect balance between examples, visual representation, staying on track, and keeping it simple yet effective. I can't keep focus on my professor because they keep going on tangents but your videos keep me engaged. Thank you so much for what you do!

[@rudrakhandelwal7576]

Sir you made me love economics, I hated it before

[@DrAzevedoEcon]

That makes me happy to hear!

[@khushiteotia5028]

HELLO SIR, This is someone thanking you for such great videos from India:)))

[@DrAzevedoEcon]

You're welcome!

[@WarzoneMasters]

this class is amazing🙂

[@elanurerdogan8586]

thank youuuu

[@DrAzevedoEcon]

You're welcome!

[@larkanikahsomersille8379]

Hi sir! Thank you so much. Can I ask for help? Our prof didn't teach these to us. Thank youuuu 3. A super typhoon greatly affected the mango farms in Philippines by making the mango crops taste super sour and some were developed prematurely and were scattered on the ground making them not eligible for sale due to defects. (a) Explain what happens to the consumer surplus in the market for mangoes. (b) Explain what happens to the consumer surplus in the market for mango shake. (c) Illustrate your answers using equilibrium diagram with the consumer surplus diagram in one

[@DrAzevedoEcon]

Think about how this will affect the market for mangos....specifically the supply curve for mangos. Are there more or less mangos available for sale? By drawing what happens, you'll be able to see what happens to the equilibrium price of mangos as well as what happens to consumer surplus in that market. Part (b) then asks you how this is going to affect another market....the market for mango shakes. A change in the price of mangos is going to cause either the demand for mango shakes to shift or the supply of mango shakes to shift. Think about how mangos are related to mango shakes. Once you know which curve is going to shift, draw the picture and see what happens to consumer surplus.

[@sonusaluja7336]

Fantastic... 👏🏻👏🏻

[@DrAzevedoEcon]

Thanks!

[@arpitdhiman591]

Underratted ofc😢

[@bbeeyangli]

so ,i came to ch 7 ! ! thank you! i like your course btw. they are the best economics course. my thinking about this chapter: Currently, it seems evident that economics is still in a very early stage, lacking an optimal mathematical correspondence. Similar to how calculus is matched with Newtonian mechanics, current statistics theory in mathematics is weak. The flaws in this part of economic theory include: 1. Economics has not proven whether total surplus is the most important variable for human being, which obviously it is not. If it's not, then it's not necessary to completely follow market theory. 2. Consumer surplus does not represent actual happiness or well-being; it's just a theoretical abstract variable. Sometimes consumer surplus only indicates that a person is relatively wealthy, hence having a higher budget or he has little knowledge before so value it high(or low). Additionally, the happiness brought by material goods is very limited. 3 Consumer surplus sometimes(very offen) is fake. Because consumers might only realize how good or bad a product is after purchasing it. Moreover, as perceptions change, the consumer's valuation fluctuates. Maximizing consumer surplus based on mistaken perceptions can actually be detrimental. So a conclusion emerges based on 3: If statistically most people are inclined towards evil or ignorance, then a free economy would lead to the maximization of errors! So, for instance, a free market may not necessarily make the greatest works of art the most profitable, but rather favor those that appeal to the tastes of the majority, maximizing consumer surplus. Therefore, the most popular products are not necessarily the best, but those that maximize consumer surplus at the statistical level for most people's valuation.

[@DrAzevedoEcon]

Thanks for the kind words. You've brought up some valid criticisms, but nothing you have said would result in the conclusion you draw. All of the issues you have brought up have already been discussed in the literature. Nobody ever said that consumer surplus is a perfect measure of well-being. It is simply one way of measuring economic well-being. Any measure you choose will have good aspects and bad aspects. However, the claim that a free market would result in a maximization of errors simply doesn't follow.

[@joemob1263]

I benefited a lot from your video lesson thanks a lot. I wonder if you have a video about Externalities and public goods? would u kindly share the link?

[@DrAzevedoEcon]

Actually, I do! kzbin.info/www/bejne/aIjaeYpuqb2IqNE

[@joemob1263]

@@DrAzevedoEcon thank you, sir

[@levirickoMusic]

Hi.. sorry am late for class but who got chapter 8 plis?

[@Austin42NO]

Hi @DrAzevedoEcon! I really love your videos and they’ve been of great help in my understanding of the concepts I’m currently learning in my Principles of Economics class. I was wondering, as a suggestion for future videos, if you could cover Chapter 8 or Deadweight loss. It would be much appreciated! Thank you!

[@DrAzevedoEcon]

Austin - Thanks for the kind words. I'm glad the videos have helped. If you'll take a look at my chapter 6 video where I talk about price floors and ceilings, I actually do cover the welfare implications of a tax. I show the impact of a tax on consumer surplus, producer surplus, the deadweight loss of the tax and how to calculate the tax revenue.

[@jameswu9715]

Hel Sir, thank you for the video. do you have any other videos explaining Application: International Trade?

[@aswathiraghunath8750]

Hi @DrAzvedoEcon , your videos have been extremely helpful , thank you so much! Wish you’d kept making more videos .

[@xpotatox4152]

Hi sir, I've been learning from your channel from beginning of the book till chapter 7. I wonder if you've discussed chapter 8 and above? This channel has been really helpful to me.

[@DrAzevedoEcon]

I'm glad my videos have helped. I do not cover chapters 8, 9 or 12. I do have videos on my page for chapters 13 through 17. Here's a video in which I cover Externalities and Public Goods kzbin.info/www/bejne/aIjaeYpuqb2IqNE

[@xpotatox4152]

@@DrAzevedoEcon Oh that's unfortunate to hear. But thank you for responding, I will surely watch the chapters that you have discussed in this channel after I'm done with the missing ones. Again thank you sir, amongst all the channels discussing microeconomics, this is by far the most effective one.

[@youisyap4729]

This class is amazing, thx u👍