Example Income and Subsitution Effects For Normal and Inferior Goods

[@maximkugel3099]

Its criminal that universities cannot explain concepts as well as what you can find on the internet, FOR FREE. I salute you sir, doing gods work

[@alexmaranga2180]

Yet they ask that question

[@user-mb7ov8bs8f]

My Uni dosen't even have the lectures for eco. They just gave us a book... Oh no... They told us what book to Buy.

[@Wthieme1]

I understand income and substitution effects much better after watching your video. Its more informative and easy to follow than either my professor or my textbook. Thank you!

[@economicsfun]

+Will Thieme You are very welcome. Hopefully you will get a chance to share and like the videos. This will help others find them.

[@weaselychicken]

+Babar Ahmad Khan Wtf are you on about mate

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gooby goobton something We shall reveal everything of how your teaching staff pick on Asians for harassment and blackmailing purposes and failed them by design if he denies to pay you money for your vacations ?

[@arzunurpolat]

The good is a inferior good. What happens if the price of substitute goods increases? How do the demand shifts change? Can u please answer my question?

[@AK.]

This is the best explanation I have ever seen. Even my prof couldn't explain it this well

[@Panda1991ish]

This 13 minutes is much better than my 2 hours Purdue Econ class. Thank you lol.

[@billwalton1091]

Shout out Econ 251

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[@mikeblack9109]

this is more helpful than my lecturer

[@mmmnnn302]

Mike black really

[@dylankrejci9965]

Wow, your simple graphic of sliding the new budget line to be parallel to old indifference curve made way more sense to me than my professor drawing everything out on paper. Thanks for this awesome video!

[@sharissasterling3720]

Thank you so much this was so simple. After a week of classes, and several failed attempts at self learning, I finally understood. I actually want to cry, thank you so much

[@ashleyyy8036]

I just wanna appreciate how organized and clear and neat this explanation is. This is so good. So good. So amazing. So nice. So clear. So nice.

[@hodlatodla5364]

Great video. For those that wish to go into some details: The intermediate baskets of goods in the video were all constructed with the Hicks method for finding "income-neutral" baskets. There is another method, the Slutsky method, were the intermediate basket of goods is built with a parallel line to the new budget line that we find (and here's the difference between the 2 methods) by stopping once the parallel line touches the original basket of goods. Our Slutsky budget line will be tangent to a new indifference curve at a point; this point is the Slutsky intermediate basket to be used for the Slutsky decomposition.

[@theuniverseeconomics]

Excellent video. I read the chapter from Micro Textbook and your video clarified things for me.

[@sweetsue1014]

OMG this is by far the most simplist and logical way to explain the income and substitution effects! I been trying to understand how to do it with many videos and they could not explain it! I love this video!! Thank you sooooo much!!

[@ahccah]

You are going to be the reason why I do well on my midterm. Thank you and keep the videos coming.

[@economicsfun]

+ahccah Thanks, but you deserve all the credit. Good luck in your studies. Hopefully you can like and share the videos so other students can find them.

[@pkpk1309]

You are better than my professor.

[@streetlife3866]

you are the best one who can explain without any confusing students

[@remixowlz]

Your video animation as well as explanation is world class! As a visual learner it really helped me a lot! Thank you for your effort in creating such in-depth tutorials! Cheers Subbed!

[@deshanibandara9618]

Thank you very much. This was very helpful for my exams.

[@user-zn4em4ms4c]

I'm from Kenya ...and your videos are very helpful ...❤

[@sakshamkatiyar5048]

With my textbook I use to sleep in these type of topics.....but here it is made so easy to grasp..... Thanks a lot...♥️from India

[@MegaNerevar]

eXCELLENT animations and tutorial, you deserve way more views

[@economicsfun]

+MegaNerevar Thanks! I am working my way up the view latter. Like and Share, it helps get the word out.

[@demboahmed960]

Best explanation so far

[@economicsfun]

Yes I will. I am also adding more content. I have channels on Statistics too. Make sure you like MyBookSucks on Facebook (see link in video description). I post new material there as well and you can find links to all my channels.

[@economicsfun]

That is great to hear and good luck in your class too.

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[@wjtan351]

how do you draw the parallel line, that is tangent to the 1st indifference curve? How do you find the points at which they are tangent? How do you find point C?

[@ED-iq3mv]

this 13 minutes video made me more understand than my 2 hours boring class thanks, this video is very helpful

[@Yamkeladamoyi]

best lecturer ever!

[@economicsfun]

Brianna, thanks for that. It is good to know that you think my videos are the best vides ever. If you have not already done so, Make sure you like MyBookSucks on FaceBook (see link in video description). This will help others find the educational videos.

[@economicsfun]

Thank you. I don't have an econometrics channel but I do have a whole channel on statistics called statisticsfun. You should be able to see a link from this channel to my other channels.

[@bernicelaryea4984]

best explanation so far

[@bamschilders]

Slow, but so effective, perfect pace. Thank you very much, it wasn't that clear when I read my book but it is now clear

[@ehurnlee]

My skin cleared up, my relationship has never been better, and student debts paid off thanks to this video 😂💯👌👌

[@sarinapathak7632]

You are a savior. Thank you!!

[@akashchakraborty1081]

u have no idea how much this helped

[@minnieyuusa]

How do u know where to place the indifference curve II on the new budget line?

[@deepakthapa9528]

even i have same problem. Confused where to put ic curve :(

[@RangeAhmed]

i think the way you have to look at it is you're answering a question. If the good is a normal good, then the income effect is positive and therefore the new indifference curve will have a to reflect the new (higher) quantity of the good that will be purchased. The same goes for decreases in price. For inferior goods, the income effect is negative and therefore the new indifference curve you draw must reflect the respective outcomes that occur when price rises/falls for an inferior good. So just look at what the question wants and from there draw your graphs! I hope this helped!

[@Naeemkhan-rv4kf]

for that u hv to read indifference curve properties, that it always convex to the origin

[@MathsHistoryHelp]

I believe as long as you are within the boundaries of the original curve, which itself a subjective point. The curves can be drawn in different places, as long as they are tangent to the budget constraint line

As far as I know, you always place it at the max satisfactory bundle/point which is where the slopes of both the budget line and the indifference curves are equal.

[@epiclegend3825]

I have a real question, for inferior good why is the IC2(indifference curve2) placed differently tangent to the Budget Line 2 compared to the normal good? It's somehow placed too much up along the budget line whereas for normal good it's placed on the middle

[@rebeccaluo6570]

u saved my literal life

[@MyDearKyoKun]

Really good explanation, thank you :) Also - you might consider being a therapist in your free time, your voice is so soothing lol xD

[@KermitDominicano]

I understand this way better now. Thank you! I wish my professors were this thorough

[@rupertron]

Wow! You should be doing this full time! The video was superb, and the animations were spectacular- very lucid and self-explanatory. Kudos, and much thanks!

[@josephdenney351]

BRO HOW ARE YOU EXPLAINING THIS SO FUCKING WELL??!!?? 👏

[@erikgregorywebb]

Very helpful. I appreciated the detail, graphics and the explanation as a whole. Thanks!

[@arshansoleymanianfar854]

Best and only video which thought me everything about Substitution and income effect that I clearly understand. Thanks

[@mohanbandaru06]

Consider two goods X and Y. Explain income effect and substitution effect of a rise in the price of good Y if: X and Y, both are inferior good X and Y, both are Giffen good X and Y are perfect substitutes X and Y are perfect compliments

[@vesaarifi8280]

this is the best video on this topic!

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[@gex6062]

Really helped me in Khanna's Intermediate Micro class at Colgate. Thanks.

[@hannan2619]

This man is the reason i quit alcohol.

[@LuisNanix17x]

Could you explain the theory of what happens when the price of good x goes up?

[@williamsoforiatta4223]

Brilliant lecture by all standards.

[@economicsfun]

The parallel shit in the budget line is due to an increase in income. The prices remain the same, so the slope of the line is the same too.

[@anatolijputnja415]

THE BEST EXPLANATION EVER!

[@abhishek8951]

thank you soo much .. you made my day so easy ... what i was able to understand in one full day .. you did it in 13 min

[@talalahmedkhan4544]

Indeed thats a best explanation i have ever witnessed

[@sonialai5592]

Thanks a lot, explained in a very clear way

[@Yukokaisian]

A very simple and easy to understand video, I know well about income&substitution effect after watching this. Thanks a lot!

[@francrulex19]

Good but would be worth mentioning that you're showing the Hicksian substitution effect.

[@economicsfun]

You are very welcome! Make sure you like MyBookSucks on Facebook too (see link in video description). This will help others find the educational videos. Good luck in your classes to.

[@huiahhhhh]

thanks for the video, very clear and understandable.

[@economicurtis]

Totally the best way to teach this tutorial!

[@Rifkhan_Ahamed]

Alhamdhulillah....seriously its very very very helpful....

[@MrMenace3210]

Great vid. Could you explain how, for the increase in income on the inferior good, the quantity of X goes up? specifically, what is good X and what is good Y?

[@PatBatemanAM]

convinced my lecturer just hates me because this is so easy to understand now

[@lucifeers3219]

very clear illustration, thank you for your work! You saved me

[@harrythefrog1732]

thank you. you explain better than my prof

[@hashtaggaming6473]

i was stuck for quite some time but you made it clear. Thank you

[@TomLune]

so flipping helpful. Got my first assignment on this and you've made it so much clearer!

[@Chelsieenim]

You explained it very well!! Thanks❤

[@jzmnclrxx]

This video made it easier for me to understand. Thanks!

[@tonyzeng195]

Thank you very much! sir you save a lot students in college

[@nandinigupta5301]

Explained in an excellent way with correct use of graphics. Haven't seen such a neat explanation before. Thanks a ton! :) Keep making such videos ❤️

[@tvvt005]

Please do a video on slutlsky demand curve

[@gauravsinghadhikari737]

What is the slope of inferior goods? Negative or constant?

[@masterdrummer19]

This is great and all.. helps a lot, but all i see is that b is put on at a different place on the budget constraint? you could slide B down the constraint and have the same thing as normal goods...

[@AurniTasnim]

+Jack Comoss exactly my question. how do we know where to put B?

[@bulebegins]

+tazzy taz but the fact of the matter is that this is an example of ie and se, yes you could put B anywhere to the right of A but its just an example

[@TheOnePath570]

+Jack Comoss not only is b put in a different place, it's on a *differently positioned* indifference curve too. curve II is higher for an inferior good and thus point b is repositioned (both for the same proportion of rotation of the budget line)!

[@racheldiiazd]

This is amazing - so neat and easy to understand. Videos like these are perfect for visual learners, thank you!

[@raziqsadaqa9838]

Yeah . 😍

[@user-gi3iv8fb6v]

Great explanation!

[@user-lw3fr5lu5o]

Thanks this is the best

[@dulcearie]

i think you mixed up the normal and inferior graphs. for normal goods the 3rd budget line is actually a parallel shift inward to the 2nd budget line as well as tangential to to the first indifference curve.

[@user-iu5vx7zc6m]

incredible video

[@Siyavlog405]

Very helpful video for college & school students.....!😅

[@Black182heart]

Please do for giffen goods.

[@ianmezar2450]

Exactly, this man is Batman of economics

[@swaggyskye]

@@ianmezar2450 His parents: 👀

[@ILURBSUSHI]

How do you determine whether it's a normal or inferior good if the question didn't give you points A and B coordinates. How do you go about knowing which food is which?

[@ILURBSUSHI]

Good*

[@hamimibnebashar8173]

love you man,can't thank you enough

[@ckumarish]

Really nice lecture for anyone to understand. Thanks a lot for posting such a nice video with clear explanation.

[@dareajayi2563]

Thank you so much...you are a life saver.

[@clenchneerspoor]

the pace and explanations are amazing. nice :)

[@marshajessirapameswari5556]

makasih banget kak, aku berhasil masuk ui gara2 video kaka

[@vincentobwoya1094]

that perfect lecture

[@TonnyBlasty]

I understood it very well............Thank

[@michellelal9625]

This is explained very well. Thank you!

[@FretPaul]

Hi, guys! Thanks for the video, it's very helpful. But please help me to understand something here: why is the second indifference curve, for an inferior good, drawn upper in the budget line then it is in a normal good? Is it a pattern we have to follow? Is there any reason for that? Because in case of giffen goods (not shown in this video), for instance, I've noticed that this same second indifference curve is drawn even upper in the budget line, it almost touches the Y axis. PLEASE HELP! I really want to understand this. Kind regards, FP

[@drmvnarasimhasarma]

Very useful to students.Great explanation

[@jeffbates1538]

I'd only request that you work in the Hicks Demand Curve that ties into the I and S Effects. Otherwise, this helped a lot, thanks!

[@hauteswan2541]

Great and nice and easy to understand.

[@humayra_285]

simple and really easy to understand, love it !!!

[@economicsfun]

+Humayra _ Great to hear and thanks for letting me know my videos are helping you. Hopefully you can like and share the videos so other students can find them.

[@Enigmo1]

do we ever talk about how the substitution and income effect affects the consumption of good Y as a result in change in good x?

[@marmarakazm7593]

More than 3 videos create Sleeping Effect though highly educative they are.

[@brunelngoufack9976]

Hi. I think there is a mistake on your definition of inferior good. you said, "overall the price of X goes down but the quantity consume of X goes up". For an inferior good when the price goes down the quantity also goes down and when the price goes up the quantity consume equally follow the price and move up. This is the so-called Counter-intuitive Effect. You said that after 4:21 on your video. kind regards Brunel

[@ahmadsaleem5316]

Wonderful, really amazing explanation of confusing topic.