Consumer Optimization

We live in a world of scarcity. In other words, what we want outweighs what we can attain. Why? Well, we have limited resources - money, options, time, etc. When you’re making choices about what to buy, your budget, the prices of goods and services, and your preferences all act as constraints.
To better illustrate this idea, let’s return to our simple example of pizzas and coffees. Let’s also assume that you like both pizza and coffee and want more of both. If you were to look at a map of your indifference curves for these goods, you’d see that you get the most utility on the indifference curve farthest from the origin. But, since scarcity is our reality, that level of utility is probably not achievable.
Combining your budget constraint with your indifference curves can help you see how to get maximum utility given your resources. Any point at which your budget constraint lies tangent to an indifference curve is an optimal combination of pizzas and coffees. Why is it optimal? Two simple reasons: 1) You can afford it, and 2) it will give you the most happiness (aka utility).
In this video, Arizona State University’s Professor Joana Girante will further explain the concept consumer optimization and how it applies to your everyday life. She’ll also cover why your points of consumer optimization will never intersect, but always lie tangent to, your indifference curves. Finally. Prof. Girante will go over marginal rates of substitution in more detail.
Microeconomics Course: bit.ly/20VablY
Next video: bit.ly/2k1nUOK

[@marieclaudettegarella2038]

Why are u so underrated when u clearly are the best economics teacher on KZbin? I love the way you teach, u speak slowly and u make complex concepts sound easy!

[@luigiluft4920]

OMG WHAT A TEACHER, shes a living legend!!! ! !

[@heyptech1726]

OMG .... what can I say .... extremely talented teacher .... you find your vocation no doubt ....

[@shopaddress11]

Thanks! I do love to teach! -- Joana Girante

[@yusuftanrkuku]

the best ecemomics channel in KZbin but why still underrated

[@TheBIGJake111]

Few things are better for the world today then these economic concepts being supplied for free on youtube. Its great to see the channel getting into slightly more advanced material! Fingers crossed for a little game theory some day.

[@shireenkhan6847]

I am in university second semester and your videos are a life saver.

[@Derpsider]

😀😀😀Perfect combination of animation and teaching!

[@MarginalRevolutionUniversity]

Thank you! -Roman

[@Nerdreet]

This is the best economics channel but now i want pizzas and coffee

[@hbpe5]

This is a very clear lecture. Abstract ideas expressed by means of graphics and some colourful but not distractive images. The pace, the terminology, and diction the are perfect so that it becomes very useful for those students whose mother tongue is not English.

[@mr.swedishfish12]

As much as I like Jacob Clifford's videos, sometimes they're too fast paced for me. MRU is much slower and easier to understand, and their use of animations and diagrams are very helpful!

[@daniyaanees]

whoever this lady is, pleaaaase collaborate with her for more videos!! she is just toooo good

[@youngmaestro7684]

ooooh! why did it took me this long to finally find you. Honestly you are the best econ instructor i have ever come across so far. Thanks a lot for such classes may you be blessed.

[@sararajpoot8329]

So Cutely Explained 😊😊🤗🤗

[@eminemsshady2327]

greatest channel ever!

[@naderali9065]

It's my first time to watch your video but seems more helpful and like your way of teaching so nice so kind

[@gauravmohan9271]

Thank you so much..lack words to describe your contribution

[@omg9928]

Wow, you explain so good and the effects in the video with the graphs are so helpful and good toooo!

[@maissarouissi7977]

idk why but she makes me so happy

[@giuliapiccinini1108]

I love this channel!!

[@developmenteconomicsecsu8108]

Very good , Its helpful much the new professor you are extremely very good thank u for making these concepts so easy and Interesting

[@priscatembo.phillips1252]

This is extremely helpful. Good explanation

[@nelsonvalderrama8371]

thanks, great classes

[@madanchandrasarkar5574]

Excellent explanation, madam

[@muha33ed]

I'm hungry after these videos 😋😂

[@muskduh]

I value all of your marginal university videos

[@Hyn.d]

Wow THANK YOU! 😻

[@nothingmuch67]

This channel is fucking underrated!!!

[@Namrata_bhujel]

Mam u are superb 👍and lots of love from India ❤️

[@harshitha_vlog]

This is amazing and extremely helpfull

[@mallikarjunastagi1090]

tq mam, i am from India 🌹

[@MustDO786]

Excellent learning 👍👍

[@daniyaanees]

there are so many difficuylt economic concepts that only she can explain

[@arjudatabassum1377]

I wish my University had such teacher😔

[@ericah7305]

i love these videos. economics is fun :)

[@bilaltantary]

Wow what a use of animations

[@todayandthelosthistory8411]

Very good . Its helpfull alot

[@TheJokerGuns]

Thank you!!

[@DA-nu1ci]

I wonder how you made the animate demonstration. That's amazing!

[@guilhermeadan2329]

Very good !!!

[@anjulaggarwal432]

the explanation and representation are very eye catching and easy to understand. Can you please tell what applications you are using to edit the graphs please.

[@meomeo-j5d]

oh no I can't find the next video in this Microeconomics course, did they stop making it?

[@zackerykrummel1229]

I learned in my econ class that MRS = - px/py, but in this video there is no negative sign. Which one is right?

[@idarkstarx6939]

Is... Is that a Pikmin sound?

[@kentheengineer592]

0:45 skill issue Ive already resolved scarcity problem ive did an entire Phd On It But Im Not Releasing It Until 2030s

[@all4godify]

Lord help my brain

[@niharb4361]

nicely explained however solving and drawing for sums is an issue

[@hardikmuley1610]

Kindly make a video on labour market

[@MarginalRevolutionUniversity]

Hi, We have videos on the labor market in both our micro and macro courses. Micro being more about how wages are determined and macro being about unemployment, etc. Micro - kzbin.info/www/bejne/fWjEmmiCdsqbp8k Macro - kzbin.info/www/bejne/q4G1gqGHrdh_aac You might also Tyler Cowen's take on how to choose a career in a world of globalization and automation: kzbin.info/www/bejne/aJyygoChe6pke5o -Roman

[@fmym9923]

This is how economic class should be like

[@yankocaceres84]

its normal that wish i have to eat pizza after view this video?

[@TheGerogero]

Relative market price of goods is (price of pizza)/(price of coffee), but slope is (change in y)/(over change in x). Pizza is on the x-axis and coffee is on the y-axis. This confuses me.

[@shopaddress11]

Hi! If you like to think in those terms, think of this. You'll spend all of your budget, M, on Pizza, where total spending in Pizza is number of Pizzas P times the price of pizza, P_pz, so PxP_pz, and on coffee, where total spending in Coffee is number of Coffees C times the price of coffee, P_c, so M = PxP_pz + CxP_c. When you solve for the number of pizzas, which appears in the y axis, you'll get the slope P_c/P_pz. Hope this helps! -- Joana Girante

[@gauravmohan9271]

Waaaaooooo…

[@paulrembauville6187]

pourquoi c'est jamais les gars ?

[@eitansalama2921]

Exam in 5 days boys, wish me luck

[@adrianomattia5625]

first

[@veglord4481]

"The more pizza and coffe you have the happier you are" Or fat and miserable... Utility is not hapiness.

[@shopaddress11]

So true. I definitely do not recommend such a diet! -- Joana Girante

[@Stadtfeldi]

Utility equaling happiness is just how Economists like to view it, in all reality utility more or less means the desire to buy something. But boiling the term down to just "happiness" is less of a mouthful and easier to remember.