A.9 Income and substitution effects | Consumption - Microeconomics
Learn more: www.policonomics.com/slutskys-...
Versión en español: • A.9 Efectos de renta y...
This video explains what the income and substitution effects are, and how to analyse them in order to understand why we buy more goods when their price goes down.
Related videos:
-Marshallian and Hicksian demand curves: • A.10 Marshallian and H...
-Indifference curves: • A.2 Indifference curve...
Related articles:
-Marshallian and Hicksian demand curves: www.policonomics.com/marshalli...
-Marginal rate of transformation: www.policonomics.com/marginal-...
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Пікірлер: 47
i could not understand what my professor was getting at with these diagrams but you explained it so well!!! thank you!!!!
A very impressive performance you have here. Thanks for these simplifications. However, I could not comprehend what you expressed when you talked about substitution effect at the beginning of the video. Please I would need it in writing. Thanks.
I have a candidacy exam in three weeks, you just saved me about three hours worth of review. God bless.
I'm sorry for being immature, but Slutsky is hilarious.
@Policonomics
9 жыл бұрын
multiLOLable Indeed!
@Kons213
6 жыл бұрын
There's a Russian football coach with the same last name, Leonid Slutsky, who used to coach team Russia in football. Later moved to the UK to work there, British football fans had a field day with his last name... xd Motto was "In Sluts We Trust"... lol
most concise VDO on the topic .....ever !!!! bestttt :D
Can the Hicksian substitute effect be used to discribe a perfect complement preference?
grt job.really u made economics simple thumbs up!
In which direction will the substitution effect change the firm’s employment and capital stock if the price of capital increases?
how to draw a graph by ourselves in word or PowerPoint? is there any application to draw a graph like you did?
Great, loving you.
amazing thank you
How would the table look like for a decrease in price of the good?
This was pretty helpful, thanks.
@Policonomics
8 жыл бұрын
Dear +Prolui , We just uploaded our fourth video to our series on Game Theory. It's about the Battle of the Bismarck Sea, we hope you find it interesting! kzread.info/dash/bejne/ZHh4u9adZamqhc4.html If you like it, spread the word! Thanks for watching, The Policonomics Team
@hassankourani4155
2 жыл бұрын
@@Policonomics am””
what will happen for non-market environmental goods???
Great video, thank you!
@Policonomics
5 жыл бұрын
Thank you for watching! 😀🅿
Shouldn't the income effect be the derivative of the marsh demand multiplied by the Hicksian demand function not marsh (as derivative of the expenditure function wrt to prices is the hicksian demand)?
so when the indefference curve shifts upwards the equilibrium also changes?
Thank you very much
I don't understand the red line parallel to the new budget line?
@IsisMarquesDesign
6 жыл бұрын
Yes, so you can compare how much you actually can consume of x,y with your new bugdet and the amount of x,y you'd have consumed with your old budget. It is as if you had fixed the utility curve and changed the price ratios.
Superb...
I would like to see you listening to yourself once upon a time when you also did this for the fist time
Minute 4:56 are you sure that there will be no effect on consumer welfare in this case? After all, there still is a price increase. I think you mean there is no effect on quantity of x consumed, however, the effect on consumer welfare is negative.
what happen in giffen good case when price of x increases
@irGuilty
7 жыл бұрын
the demand would increase for the giffen good as well
@mohammadfarhan7349
7 жыл бұрын
irGuilty thanks
veery nice
gracias,muy bien explicado :)
@Policonomics
5 жыл бұрын
Gracias a ti ❤ Acabamos de abrir nuestro canal en español! 🅿kzread.info/dron/khb76DGIpws2gZGC9UeyHw.html
Shouldn't the red parallel restriction line pass through the initial equilibrium?
@ruthn3293
5 жыл бұрын
No
Why SE is negative for normal goods? I can't understand :(
@irentagreneity212
5 жыл бұрын
Exactly,bt it's negative.. little difficult to understand. *_*
@user-md4tw8sp1c
4 жыл бұрын
the substitution effect
@andrei-teodorene9729
4 жыл бұрын
Let's say you have pizza and burgers. A pizza is 3€ and a burger is also 3€. You don't really care about which one you buy, because both are the same price and same tasty. Suddenly, all the restaurant owners say that a pizza is 100€, you simply can't buy a pizza for less then 100€. What are you going to do? Spend 100€ for a damn pizza or just buy burgers for 3€???? I would buy burgers, everybody would do the same, I am not going to buy pizza, so, the demand for pizza is going to decrease, that's why the SE is negative, because you don't want pizza anymore, as it's too expensive, you want cheap and tasty burgers!
@Zen-ds4od
Жыл бұрын
For price increase, the SE is negative. Because increase in price will make you want to consume less of it and more of the other good instead. For price decrease it is positive.
Why do we even talk about the income effect? There is no change in Income right? Could someone please explain
@Zen-ds4od
Жыл бұрын
increase in purchasing power, same as income increase
Sister its not math its eco
stupidly overcomplicated
How much did you pay for a corpse to narrate the video?