This video shows how to maximize utility subject to a budget constraint. Channel donations are much appreciated:www.paypal.com...
Пікірлер: 105
@darkacademiax_ Жыл бұрын
Why do professors make this sound sooooo complicated. This is so straight forward thank you. ❤
@princeagyei6095 Жыл бұрын
thank you very much honorable i nearly dropped economics because of this, but after watching this video over and over again within 24 hrs ive understood, thank you my new lecturer
@baileychoy98318 жыл бұрын
This viedo just saved my Econ grade!!
@proudmalaysian24 Жыл бұрын
i cannot comprehend why my lecturer make it so hard to understand, you are truly a saviour, may god bless you sir
@angelli87626 жыл бұрын
this is so easy and staight forward, why does textbook mess up everything and make them so complicated???
@bernhardkoster30952 жыл бұрын
Sorry, but this calculation is awkward. Just divide MUx by MUy and you`re done! This trick works always by CD-utility. I don not this instructor knows this!
@swarnasishsaha9681 Жыл бұрын
This working is actually very straightforward and helpful. The textbooks on the other hand, not so much
@EconomicsinManyLessons Жыл бұрын
I appreciate your comment!
@peppa_pig_6 жыл бұрын
it takes my long-winded professor an hour and a half to explain these concepts.....thank you
@user-pf3py6kx8mАй бұрын
Ohooooo thanks have understood this it's very simple I used to struggle alot but now everything is very simple ❤❤❤❤
@n.morgan14284 жыл бұрын
You just saved my whole midterm. Than you!
@sarojdani32013 жыл бұрын
Very good explanation. Hardly good quality videos are uploaded with good explanation.👍
@EconomicsinManyLessons3 жыл бұрын
Thanks!
@TheSamthaman249 жыл бұрын
l love you,I love you,I love you
@getaway1085 Жыл бұрын
consumer has the utility function: u(x,y) = 5x + 6xy + y2 + 38x + 18y a) Determine the marginal utility for the two commodities. Is more always better for the consumer? b) The consumer has a budget of £40. A unit of the x commodity costs £10 and a unit of the y commodity cost £5. Write down the budget equation. c) The consumer wants to maximize his utility subject to his budget constraint. Write down the Lagrangian for this problem. d) Calculate x, y and e) Calculate the utility maximization,
@getaway1085 Жыл бұрын
Show me result
@himadrinag53327 жыл бұрын
Is this really a Cobb-Douglas function ? I knew that CDFs are of the form U = X^a . Y^(1-a) But here the exponents are summing up to 0.75.
@leoyu5775 жыл бұрын
Himadri Nag Yeah I was wondering about that as well!
@yifanbao82644 жыл бұрын
I feel like this is more of a CES method.
@bernhardkoster30952 жыл бұрын
@@yifanbao8264 utility is ordinal, so it does not matter if you take x^0,5*y^0.25 or x^2*y or x^(2/3)*y^(1/3) try. But only the last one is homothetic which leads in an aggregation for social welfare to a concave utility possibility curve, but all this important stuff is not said in the video, it is just stupid calculation with no explanaition!
@mikaelrecine94866 жыл бұрын
You're the best! Thank you for helping me finally complete my assignment!
@farhaanahmed8924 Жыл бұрын
Thank you so much, my university lecturers and textbooks have a combined utility of 0.
@edmondlleshi8683 Жыл бұрын
There is an error in the equation.When you multiply by 4 both sides, the left side is not anymore multiplied by 1/2 but just by 2 because 4/2=2.
@jodiancampbell39399 жыл бұрын
Why did you differentiate with respect to X for du/dy? I thought it would have been .5y .5-1, with X held constant
@banstaman8 жыл бұрын
Probably too late to know, but deriving it results in: x^.25 * .5y^.5-1, but you can move that all the way to the front of the equation, it won't make a difference. It's just much easier to work with that way.
@bethwelkimutai50266 жыл бұрын
Great video thank you for sharing this knowledge I can now better my economics grade
@yayassanyang451610 ай бұрын
I like the way you lecture
@EconomicsinManyLessons10 ай бұрын
I appreciate that. Thank you!
@pavanialahakoon6315 Жыл бұрын
Most important lesson.thank you soo much
@EconomicsinManyLessons Жыл бұрын
You are very welcome!
@tjopat3866 Жыл бұрын
Another classic Chuck Fin massive W
@patthazard60442 жыл бұрын
Thanks for the heads up😪
@marcusbowman62143 жыл бұрын
Hi thanks for the great explanation ! I have a quick question. when you take the partial derivative with respect to x ,for example, why don’t you treat y as a constant which would equal 0.
@EconomicsinManyLessons3 жыл бұрын
Example. Let U = XY + Y. Take Partial derivative of U with respect to X (we treat Y as a constant). For the sake of argument, say Y = 5 (a constant) and replace Y with 5 in the equation above, so U = 5X + 5. Take the derivative of this last equation wrt to X: dU/dX = 5 + 0 = 5. Now, replace 5 with Y, so dU/dX = Y and you get the correct partial derivative of the utility function with respect to X.
@disintegratev6951 Жыл бұрын
really easy to understand, thank you! And some white noise for free :D
@piercebedell59233 жыл бұрын
Thank you, this was very helpful.
@dagmawiyohannes74054 жыл бұрын
Suppose a particular consumer has 8 birr to be spent on two goods, A and B. The unit price of good A is 2 birr and the unit price of B is 1 birr. The marginal utility (MU) she gets from consumption of the goods is given below. Quantity 1 36 30 2 24 22 3 20 16 4 18 12 5 16 10 6 10 4 A) Based on the cardinal analysis, what is the combination of the two goods that gives maximum utility to the consumer? B) What is the total utility at the utility maximization level? Expert's answer I need the answer pls
@EconomicsinManyLessons4 жыл бұрын
This video should help:kzbin.info/www/bejne/e33biKJmmth_sNE
@anndiaz-exposito39243 жыл бұрын
BETTER THAN THE TEXTBOOK
@bernhardkoster30952 жыл бұрын
No!!!! Because the why is missing! It is just stupid wicked calculation, with no deeper inside!
@liviantus8 жыл бұрын
thank youuuuuuuuuuuu your the best saved me thank you thank you can you do example like that on income and substitution effect
@gx13131318 жыл бұрын
thank god, your video just saved me.
@bernardcotton7217 жыл бұрын
merci pour cette video cobb douglas utility function: it also works with 3 variables (private goods , leisure, public goods); see philip graves; merci à youtube !
@preciousntobeng328 Жыл бұрын
Thank you so much 🙏🏼🙏🏼🙏🏼. ❤️
@bernhardkoster30952 жыл бұрын
Why you do not just say that p_y=2p_x and 0.5 the coefficient at x is twice 0.25 the coefficient of y and therefore you directly see, without any calculation by symmetry of the problem that y=x???
@emmanuelroosevelt68403 жыл бұрын
I'm so happy, you helped me so much..
@oasisrocks2 жыл бұрын
Need help. Why didn't we multiply everything with 4 at 4:06
@tomwebster750010 ай бұрын
Absolute legend!!!
@Ausiedundan2 жыл бұрын
Thank you so much!!
@EconomicsinManyLessons2 жыл бұрын
You are welcome!
@nikogg935 жыл бұрын
Not a Cobb-Douglas, exponents must add to 1
@EconomicsinManyLessons5 жыл бұрын
The exponents do not need to sum to 1; each exponent only needs to be a positive constant.
@bernhardkoster30952 жыл бұрын
NO!!!!!!!!!!!!!!!! utility is ordinal, therefore the exponents does not need to add up to 1!!! You Prof should have told you!
@collinskibet29923 жыл бұрын
Thank you 😊 you have helped me alot
@taqi710911 ай бұрын
I love you from the bottom of Mariana Trench
@EconomicsinManyLessons11 ай бұрын
Thank you so much!
@eugeneokiri66173 жыл бұрын
awesome. thank you very much
@bianca835 ай бұрын
I still do not understand why he differentiated with respect to x for du/dy. It makes this whole thing less intuitive to follow.
@ruchikumari66583 жыл бұрын
Thank_You so much
@raihankhan43745 жыл бұрын
OMG THANK YOU WHY TF does the textbook have like 50 pages just to explain these simple steps. I hope this is right tho sounds to good to be true
@nuaminemoges61703 жыл бұрын
Very helpful
@HiPh0Plover17 жыл бұрын
error @ 4:31 4* .25x-.75y.5= x.25 and 4y.5 not just y .5
@jpratt86767 жыл бұрын
Happy Turtle The 4 is outside the fraction and it's implied that it is multiplying the whole thing but that is an astute observation
@oasisrocks2 жыл бұрын
@@jpratt8676 but he never actually multiplies with the 4 on the left side. My question is why doesn't cross multiplying not work.
@tr3vorbwir3432 жыл бұрын
Thank you so much man🇺🇬
@jojazenande88525 жыл бұрын
i dont understand why did we have to multiply by 4 and the exponents are not equal to 1
@EconomicsinManyLessons5 жыл бұрын
It's fine if the exponents do not sum to 1--the example is still in Cobb-Douglas format. I multiplied both sides by 4 to get rid of the 4 in the denominator on the right hand side of the equation; on the left hand side, 4 x 0.25 = 1.
@SweetAlexMore7 жыл бұрын
Can anyone help here? What if im given an income (m = 20), and prices of both goods (px = py = 1), and told the slope of a nicely convex indifference curve at bundle (10, 10) = -2. How do I work out the utility function, or the budget, or work out the best bundle she can buy?
@bernhardkoster30952 жыл бұрын
u=x^a*y^b m=p_x*x+p_y*y -> x*=[a/(a+b)]/p_x and x*=[b/(a+b)]/p_y this should have been told you in your first semester in microeconomics! Do not forget this!!!
@kumaripooja98474 жыл бұрын
Thank you very much
@AlokJadva Жыл бұрын
So you don’t need a Lagrangean for this ?
@EconomicsinManyLessons Жыл бұрын
No, only if your instructor requires it.
@johniechronicles32973 жыл бұрын
Just saved a brother
@EconomicsinManyLessons3 жыл бұрын
That is great!
@age.b462 жыл бұрын
please show me this solution U= -4Q2+80Q
@daydreamer23155 жыл бұрын
simple. Thanks
@enriquesanzposse61979 жыл бұрын
very useful, but from where did you got that cobb douglas equation, how do you calculate it?
@billyoung81188 жыл бұрын
I'm sure it is far too late for you to get this answer now, but I wanted to respond. The Cobb-Douglas equation is a really big deal in advanced economics classes. Its form is: Y=A*Labor^(beta)*Capital^(alpha). In this case, they changed the formula a bit to become U=X^a*Y^b (with a and b being constants). It has a lot of uses, for instance to show how to continue to grow a business when efficiency really can't be improved (machines and workers can only work so fast). There are entire books written about that formula and entire programs of study in masters degrees devoted to it. It is really not possible to go into enough detail here, as this formula is really the mac-daddy of economics equations.
@richardhufnagle54387 жыл бұрын
how do you get the beta and alpha though still very confused on this equation.
@bernhardkoster30952 жыл бұрын
@@billyoung8118 Sorry but CD first semester and has nothing to do with advanced stuff. Its just the geometric mean, or you ask for a function with substitution elasticity of 1
@migzwrld9092 жыл бұрын
thank you
@danuka96392 жыл бұрын
Superb 🔥
@Yokchen5 жыл бұрын
You save me life
@rachelmace76836 жыл бұрын
Thank you sooooo much
@quanvu21007 жыл бұрын
thank you so much yes yes yes
@joetom1023 Жыл бұрын
Can i share a question and you do it for me
@Samirkoful6 жыл бұрын
Thanks man!!!
@khayalamimahlalela79044 жыл бұрын
Thanks man
@edgarallanpoe83095 жыл бұрын
thanks lad
@betitg8681 Жыл бұрын
Tnxs🙏🙏
@bonangmafokate99228 жыл бұрын
Thanks bra
@lucsolberg84665 жыл бұрын
SAVIOR!
@simonblay7734 жыл бұрын
This solution looks a little confusing. COBB DOUGLAS WITH THE EXPONENTS NOT UP TO 1.
@EconomicsinManyLessons4 жыл бұрын
There is no requirement for the exponents on a Cobb-Douglas function to sum to 1. The exponents only need to be positive.
@bernhardkoster30952 жыл бұрын
do you know the difference between cardinality und ordinality look it up!
@avinashkour99665 жыл бұрын
Gud explain sir .....👍thnx
@ellykalchenko3235 жыл бұрын
i love you) thank you
@impolitikful6 жыл бұрын
I thought U = square of x*y ?
@EconomicsinManyLessons6 жыл бұрын
A utility function can take on many different forms. U = square root of X*Y is just another example of a Cobb-Douglas utility function. The general Cobb-Douglas form can be written as U = (X^a)(Y^b).
@impolitikful6 жыл бұрын
thanks
@thekayespace3 жыл бұрын
Hi! why is it -.75?
@EconomicsinManyLessons3 жыл бұрын
The exponent on the X variable after the derivative is X^(0.25 - 1), which simplifies to X^(-0.75)