10. Welfare Economics
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- Опубліковано 17 чер 2024
- MIT 14.01 Principles of Microeconomics, Fall 2018
Instructor: Prof. Jonathan Gruber
View the complete course: ocw.mit.edu/14-01F18
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This lecture covers the fundamentals of welfare economics, including how competition maximizes welfare and government interventions.
License: Creative Commons BY-NC-SA
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Never had a professor teach as good as Dr. Gruber in all my courses at my university.
Posting these videos for free, is like the food bank one where thru a non market transaction (since we don't pay anything to watch this), Resources (the different lessons here) are allocated more efficiently without violating equity to people who need a specific resource (lessons). Thanks MIT for guiding me thru my journey
But with the logic of opportunity cost, you are implicitly paying for the videos with the time spend to watch it.
@@sidharthar567 The Time spent watching the videos is nothing compared to the Sunk Costs of going to college itself, not even considering the other variable costs like cost of living in a foreign country to physically attend college.
@@HarshvardhanKanthode Sad reality, but I have to agree
I'm a secondary/tertiary educator and I like to use MIT OCW lectures as one of the reference study material for my upper secondary and undergrad students (I always watch through the lectures before recommending them), and I've got to say that Prof Gruber is one of the best microeconomics lecturers around, excellent quality of lectures, honest and understandable, he obviously knows his stuff 100%. Gruber along with Mankiw (Harvard) are a dream team combo for solid upper secondary/early undergrad microeconomics. 👨🎓👨🎓👨🎓
Dr. Gruber, This is the greatest form of philanthropy 🙏
May God bless you with 100 more years to impart knowledge for free to the needy.
Thank you so much Professor! I am studying Agricultural Economics in Australia and was really struggling to understand the welfare economics but you made it easy to understand. Thank you!
Thank you so much! It's one of my favourite lectures of MIT
Since my microeconomis class in Sweden is like watching horrible movie, I love watching these first class lessons.
This is such a great lecture series!
The professor is so interesting!! The lecture makes me actually think about concepts rather than just learning up theories. As a singer and musician I really enjoyed him using concert examples to explain. I wish I could have a chance to study with such a professor . This video made me so happy, thank you Prof. Jonathan Gruber :))
I'm glad you like concerts. I personally have vowed to never, ever, go to a concert again. I do not like the crowds that spill or spit things on you, I don't like the loud music, I don't like the intrusive security searches, and I do not need the occasional captive religious or patriotic indoctrination. I guess everyone is different.
Amazing lecture! Thanks
Such a great lecture
I just learned about stubhub thanks!!
Very good teacher
I get a feeling that professor’s music taste is probably very sick
Great catch
I believe the professor misspoke at 42:32. The firm is making a profit of pi because at q2, the price (marginal cost) is above average cost, not marginal cost.
vere good class sir,I,m telling from Bangladesh.
Me too
What if the taxi drivers can't or don't want to provide more quantity, ie increase the supply ? In this case there will be an excess of demand and price will increase. And so it will be back to equilibrium?
why the people leave that quick, i would love have a class with a teacher like him haha
they have other classes to get to or limited time to eat between classes
they need to go finish hw bro
ياريتني والله قادرة اجمع كلام الدكتور ده وافهمه ياريت كان عندنا شرح لكل حاجه في المنهج زي الأجانب كده💜😢
اعمل بجد وتعلم اللغة الإنجليزية. إن شاء الله ، في يوم من الأيام ستتمكن من فهم كل هذا. أنا أيضا اعتدت أن أكون في النقطة التي أنت فيها. الآن بعد أن قمت بتحسين لغتي الإنجليزية ، أتيحت لي ملايين الفرص.
Somebody could please explain me the meaning of AC2 in 40:15 if we just look at the average cost curve AC1? Thanks a lot!
As Marginal Cost increases with every extra unit produced, which means that every unit you produce costs more than the previus one, so does the Average Cost. Basically, AC2 is the Average Cost of producing q2, and AC1 is the Average Cost of producing q1.
I hope that helps.
@@Mafasamo55 thanks a lot!
@@Mafasamo55 But we are still measuring the profits comparing the Increased Marginal Cost and the previous Average Cost Curve AC1, so AC2 is kinda irrelevant in this example right?
open and free education apparently doesn't work with ad blocker
Book recommendations for these lectures
From the syllabus, "There is no formal textbook for the course. If students are interested in further reading, they can look at the following book: Perloff, Jeffrey M. Microeconomics, 7th Edition. Addison-Wesley, 2012. ISBN: 9780133456912." For more info see ocw.mit.edu/14-01F18. Best wishes on your studies!
47:00 perfect, educational punchline. xD
I'd take his following statement with a spoonful of salt however, as Uber is now obviously a monopolist in its own special market due to network effects, and has an easy time scooping off profits. Ironically next lecture's topic.
Uber is unprofitable as hell...look at their income statement. The reason Uber is not a monopoly in the sense of obtaining rent-seeking profits is that consumers have alternatives - walking, driving, carpooling, etc. IMO Uber probably will never be profitable, in fact. It burns cash.
@@reclearning558 I guess you're right. I hadn't realized how many issues their core business has in generating even any profits. I thought the network effects were stronger and at least competition more restricted, which is how it seemes to me elsewhere (I've actually never used Uber, as it can't operate in much of Europe, and I've only used Grab and didi chuxing in Asia) and that the slim assets model was more foolproof.
I wouldn't agree with your monopoly definition though. The only real alternatives and competition are other ride-sharing services or regular cabs; in the same way as railway companies and airlines are no competitors if the infrastructure doesn't fundamentally change. Just because you can buy an apple instead doesn't mean there couldn't be banana monopoly if the market had just one massive provider in a market. People's mobility habits and options often aren't all that elastic.
@@domsjuk Fair enough, and perhaps their elasticity would change by customer & by city (i.e. walking is an easy alternative in NY, but less so in LA). So I see you point, even though I'm not sure how you would prove a global elasticity for all customers in all situations...
I guess I feel the monopoly label is thrown around too easily & I don't typically agree with the logical implication that a business should be broken up. I don't see very many failures coming from the market itself...especially when it comes to monopolies. If anything, Uber is a direct subsidy from investors --> customers...because it's SO unprofitable.
@@davisclute7705 That wasn't my point of course. Why would I suppose to prove such a thing? Of course this is dependent on the area and situation, but basically it means that cases when people "need" a taxi for a certain distance, where alternatives are not available or not viable are empirically abundant, regardless of the reasons for that. That is all the generalization I intended.
That is a fair point, too, it is definitely overused, although you seem to have that colloquial interpretation in mind as well a bit. A monopoly can be a monopoly and bring with it all the advantages and disadvantages one might expect, with regard to welfare or innovation for example, even if it's ever so unprofitable. We should try to use the word objectively either way.
Is there such a thing as "the market itself" though? I think it is a fundamental issue in modern economics that people assume there is such a thing as the essence of a market without any context and additional issues, as if we just have to limit interference to bring out the best in it - I think that is a dead end. Such a thing may exist for fully automatized trading among machines or algorithms, and even there I wouldn't be sure to call it a pure market. Markets are social and always embedded, and as long as one doesn't decide to turn every human into a homo oeconomicus and every-thing and every act into a good there is no point in striving for such a thing in itself either. Markets are just a tool.
@@domsjuk Ya, I apologize if I misconstrued your point. Understood your were merely pointing out an example.
By "market" I merely meant a collection of individuals engaging in free trade within a system of private property. This is obviously taking us far afield from the original point...but I was saying that I feel the discussion around market failures & suboptimal equilibrium is over-emphasized. I don't see very many failures as coming from a system of free trade within the context of private property. Conversely, governmental failures don't get talked about nearly as much...but I can come up with a depressing number of examples of these types of failures, unfortunately.
If you'd like, I've love to continue debating (but not here in comments section). My email is DavisClute at gmail.com -- You clearly know the subject & I'd love to go back/forth with you a bit. I suspect we have very different intuitions about markets (i.e. systems of free trade), so it'd be fun to trade thoughts.
It seems like all governments that impose regulation by for ex. capping price to factors of production have not taking this class... Or am I wrong? :0
Politics man. Politician in a democratic society will do whatever to give them the most vote. Their action may not always align with their voter, but they always act so that they get the most vote. And in non-election time, they act to get them the most power and money when they leave the office.
17:20
6:22
Modeling an economy as if there were one consumer and one producer is a pretty strange thing to do.
Hi Nathan, I'm looking for some help in microeconomics, could you help me with that?
It's communism in disguise
DO IT ALL- EXAM
🇹🇿🌍
update: taxi medallion king died in 2021
This is pure ideology
Yeah, that's what a normative analysis is. Positive is based on facts and true statements, normative is how things ought to be which depends on ethics which is really down to what everyone values
There are a few things I wanted to say:
1.) I don't really like this lecture because it uses too much unnecessary mathematics. The mathematics should be simple and straightforward in my opinion, because after all, the concepts are probably not that complex.
2.) How to you encourage people on welfare to eat healthier? Do you restrict what they can purchase with food stamps? No, that would be too complicated to do (just like putting names on concert tickets), and it would probably be counter-productive. The solution, is to give them some fruits and vegetables for free at a food bank. They will then learn to eat those fruits and vegetables.
3.) I believe that America's and the world's economy is developing some serious problems which reduce equality and quality of life. In particular, I point to the fact that much of the economy consists of "granted monopolies". For one example, look at the pharmaceutical industry which is given a granted monopoly to treat a variety of diseases with drugs that are often only marginally effective. In many cases, natural cures are just as effective but the doctors are not allowed to "prescribe" those!
4.) We have to ask the question: What is the purpose of severely penalizing welfare recipients who have any income or assets? Is this a "control policy" to make sure that people on welfare will always remain poor and dependent upon government handouts? I think someone needs to work on the math behind these income and asset limits, and what their true purpose is. Notice that these limits are getting much stricter with time and as they pass new monitoring laws. In the end, The goal I think is to make it impossible for people on welfare to survive.
On the one hand, Gruber is a great pedagogue. His course is really entertaining. On the other hand, the whole matter is just bullshit. Hypotheses are pure non-sense and there is a mathematical error every 5 minutes. I have no doubt that Gruber is exposing the "best" of microeconomics. But this best is anything but science.
I thought this is MIT, and the course is microecons, felt more like a course in ideology at elementary school
Nondisabled people with nondisabled children, should not get welfare. Parents should be the most responsible of all. Yet too many are not, and have no competitive drive, for their own children. SHAMEFUL, IS THE PARENTAL DEGRADATION THAT HAS OCCURRED FOR THE LAST 60 YEARS.
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