A.14 Revealed preference | Consumption - Microeconomics

Learn more: www.policonomics.com/revealed-...
This video explains how revealed preference theory works. We'll learn how to use both the Weak and Strong Axioms of Revealed Preference, in order to derive a utility function from consumer behaviour.
Related videos:
-Utility function: www.youtube.com/watch?v=z0YUX...
-Indifference curves: www.youtube.com/watch?v=JVadA...
Related articles:
-Utility function: www.policonomics.com/utility/
-Paul Samuelson: www.policonomics.com/paul-samu...
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[@blhfs]

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[@alexanderazar3582]

I think the assumption that A is preferred to B is not guaranteed. If we know A is the chosen bundle, then it must be preferred to B, but we cannot assume that all the points on the budget line are preferred to the points under the budget line or that trivializes everything.

[@lukemacon1]

I agree with this - however in the revealed preference context I think what is meant is more that if you observe one bundle (A) while another one (B) was affordable the entire time, then that bundle (A) is revealed preferred to the other (B). It doesn't seem to have anything to do with budget lines except the budget line shows which bundles were not affordable. And since you can't tell the difference between a not preferred bundle and a not affordable bundle, scooting around the budget curve for is useful for demonstrating transitivity (strong axiom). It seems to me like the idea was mostly right but just the wording could be redone.

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[@Policonomics]

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its a lot easier to understand than those in the text books! so great it will help my report a lot thanks :)

[@Policonomics]

Thanks!

[@TheJezas]

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[@Policonomics]

Today's featured video explains the very basics about Revealed Preference theory: A.14 Revealed preference | Consumption - Microeconomics Learn, and enjoy!

[@sandeepabiswas9771]

nice video

[@junkfire4554]

I'm not quite following the reasoning at 1:33. Couldn't B still be preferred if the agent chooses to not spend all her resources and doesn't want as many of either goods as bundle A entails?

[@rushy9895]

jack whack no as the preferred point is where the indifference curve is tangential to the BC. As B doesn't lie on the BC it cannot be chosen as there is no where for the IC to be a tangent to it

[@andrei-teodorene9729]

Hello! Bro, it's a shit concept of economists. They say that you MUST ALWAYS USE ALL YOUR BUDGET, and the choice where you use all your budget is the best choice. The concept "The more is better" is like a GOD among economists. Suppose you go to a restaurant and buy 3 pizza and 3 cokes. If you can afford 4 pizza and 4 cokes, economists say that this is your preffered bundle, because you bought more, they don't care if you can eat and drink 4 cokes and 4 pizzas, they keep saying that this is your best choice.

[@andrei-teodorene9729]

That's why NEVER EVER YOU CAN HAVE A Px/Py>MRSxy. In economists' mind you have 2 options: You can like a bundle that you afford and you spend all your money on it or you can like a bundle that you don't afford. They don't accept you to like a bundle where you spend less than your income. So, if you earn 1 million $ per year, from economists point of view you must preffer a Ferrari 458 Italia (which is 1 million euro) or a Buggati Chiron (which is 2 million euro). You can't like a 35k Honda Accord, it's impossible from their point of view. I know, it's something really stupid and it has nothing to do with reality, but that's microeconomics in the beggining, as the time pass, you'll learn that you can save money or borrow money (that's even more idiotic, if you have money for a Ferrari but you preffer the Bugatti, you have to borrow money to buy that Bugatti, doesn't matter you'll pay your whole damn life for the credit, it's economics, you can't contradict it :)))). Oh, and you can't be on a diet if you respect microeconomics principles. If your monthly budget for food is 2k$ you have to spend all of it to meet your preffered choice, you can't soend less and eat less, you must be fat and sick but respect the tangency rule :)))).

[@nigginogga8071]

video anda sangat bagus dan mempunyai mesej yang luas terima kasih

[@user-np6un5st1w]

macam mana nak buat?

[@lukemacon1]

This is a great video that clarified a lot of things for me. Your videos in general are fantastic, actually. I wonder if this video is technically correct though. For instance, if A was revealed preferred to B in the first instance, how could C and B both be preferred to A in the second instance? The fact that A is revealed preferred to B in the first instance eliminates the possibility for B to be preferred to A in the second instance by the weak axiom, right?

[@lukemacon1]

I wanna reiterate that the video is great though, even if I had some funny questions about it, the video still really helped put things in the right perspective

[@kavitham6497]

Thank you

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Awesome

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[@saurabhpal0]

nice video

[@Policonomics]

Thanks for watching Saurabh Roy!

[@vinodbittu5276]

「上記のギフトのいずれかを選択できます」、