A.10 Marshallian and Hicksian demand curves | Consumption - Microeconomics

Learn more: www.policonomics.com/marshalli...
Versión en español: • A.10 Demandas Marshall...
This video explains how to build the Marshallian and Hicksian demand curves. We analyse Hicks' decomposition of the income and substitution effect, from which we derive both demand curves.
Related videos:
-Income and substitution effects: www.youtube.com/watch?v=w9z_I...
-Indifference curves: www.youtube.com/watch?v=JVadA...
Related articles:
-Income and substitution effect: www.policonomics.com/slutskys-...
-Consumption duality: www.policonomics.com/consumpti...
Thank you for watching!
www.policonomics.com
Learn, and enjoy!

[@movingparts6270]

In three minutes, you explained what my Master's Micro professor couldn't in two hours.

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[@joshmanto2097]

In 4 minutes i got to prepare for my midterms in 15 minutes from now. Thanks for uploading this

[@wahyufirmanto6524]

Very easy to understand. The world needs more people like you who can teach in simple ways. Thank you!

[@youhenok]

You saved my big time. Thumbs up. I appreciate.......Keep on posting to specialize

[@Policonomics]

Dear Henok Fasil, thank you for your kind comment and thanks for watching!

[@esthermetieh6320]

I have an intermediate micro quiz this morning and this has helped my understanding a great deal!

[@sujatasharma2391]

In less time, extreme knowledge effect superb...... Quality of education... Nice

[@talonvanslack6814]

You explain this perfectly, thank you.

[@David-xf5vk]

Really great explanation for the time, i wish more videos are able to be as concise and as quick as this one!

[@Policonomics]

Thanks +David Rahbani !

[@Policonomics]

Dear +David ,
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!
ua-cam.com/video/2DDYtd5FDUk/v-deo.html
If you like it, spread the word!
Thanks for watching,
The Policonomics Team

[@vg9311]

Really helped add clarity, thank you! :D

[@supderduper7777777]

brilliant! Thank you so much!

[@marthenrobinsonpellokila7445]

Briefly and clear explanation. Thank you

[@coop0nfire]

Thank you for saving my life.

[@acnotinforever561]

another well demonstrated topic...thanks once again.

[@Policonomics]

Thanks +Acnotin Forever !

[@gohhuiru9041]

It is very useful, thank you

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Thums up.... Superbly Tought in this video...love it...n Thanks

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Excellent video. (First time comment on UA-cam)

[@dil9112]

Good explanation.thank you soo much!!

[@raaviaggarwal4061]

Amazing explanation!

[@Policonomics]

Thank you +Raavi Aggarwal !

[@swetavijayan160]

Great work!

[@Simran-xn7ec]

Such Amazing. Much Appreciate. Wow.
Thank
-Doggo

[@maryamsherazi74]

well explained. Thankyou mam

[@fluffyangelzx]

Omg thank you so much! Even though its not the main point but I finally understood what substitution effect and income effect mean 😂

[@Policonomics]

Dear +wisterias ,
Thank you very much for your comment! Regarding IE and SE, have you watched our video? Here it is, in case you missed it:
ua-cam.com/video/w9z_I-5QZ0o/v-deo.html
Thanks for watching!
The Policonomics Team

[@muhammadnaqeeb7480]

ammazing..thanx for this great job

[@Policonomics]

Thank you +Muhammad naqeeb !
We have just uploaded a new video on subadditivity:
ua-cam.com/video/qW9IFtPy6SM/v-deo.html
Best,
The Policonomics Team

[@rantao669]

you really help me a lottttt!

[@muhammadnaqeeb7480]

easy to understand ..woow

[@paragjain5469]

Thank You. This is extremely helpful.
Please also tell me if Indifference Curve and Price Consumption Curve is the same thing ?

[@Policonomics]

Thanks +Parag Jain !
Regarding the price consumption curve: it corresponds to the curve that joins different equilibria points when price varies. In other words, when price changes, we move to another indifference curve, and look for the point of tangency with the new budgetary restriction (given by the new price). If you do so multiple times, you'll be able to build the price consumption curve.
Thanks for watching!

[@dinglebeey]

Thanks, although that indifference curve should not curve upwards at the end right ?

[@kkikkodan]

Can you pls explain how you are dropping the points on to the new graph

[@hillarykoranteng3058]

terrific video

[@WashingtonMonster86]

Does anyone know why the indifference curves are placed arbitrarily on the budget constraints? For example: from point a to b, what is the reasoning behind those position points?

[@Policonomics]

Dear +WashingtonMonster86 ,
The indifference curves are placed that way to ease the graphical representation. We wanted to be able to clearly show what the income and substitution effects look like in this example.
Of course, there is an infinite number of ways we could have drawn this diagram. However, in order for it to be a normal good, B had to be to the right, and C between A and B. If there are positioned in any other order, you'll end up with a good that will be either inferior or independent. At the end of the video we cover these scenarios in a table, in order not to draw four other diagrams.
We hope this answers your question!
Thanks for watching!
The Policonomics Team

[@mouradmadouni8277]

Wonderful !!!

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Behtareen.

[@shagiandrew308]

What an explanation

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you are the best

[@fluffyangelzx]

If possible, could you do videos on auctions, bidding and bargaining? Thank you!

[@Policonomics]

Dear +wisterias ,
We didn't plan to do any videos on auctions, bidding and bargaining. However, your request is much appreciated, and we'll develop some in the future. In early 2016 we'll be uploading a next series, on Game Theory. We hope you like it!
Best,
The Policonomics Team

[@fluffyangelzx]

+Policonomics
Awesome, thanks! Need some help on game theory too 😂

[@Policonomics]

Dear +wisterias ,
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!
ua-cam.com/video/2DDYtd5FDUk/v-deo.html
If you like it, spread the word!
Thanks for watching,
The Policonomics Team

[@solankimitra2749]

I couldn't understand the part from 1:33 . Can you please explain!

[@bennykabwela1962]

nice but too short....I thought you would be going into the slucks analysis

[@Policonomics]

Dear +Benny Kabwela,
Thank you! You can learn more about Slutsky's analysis in this video:
ua-cam.com/video/w9z_I-5QZ0o/v-deo.html
Thanks for watching!
The Policonomics Team

[@uroosashakeel7361]

if we assume that x1 has zero own price elasticity then what will be??? plzzz give me answer by graphically :(

[@joyland_funvlog787]

its helpful

[@hafsamanzoor4515]

Superb ❤

[@sujatasharma2391]

Great!!!!!! 👌

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I paid tuition for not understanding what professors says and now I’m here knowing what he’s saying.
It seems like I’m paying for his BS lecture and his dog’s foods
College is a scam

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And you can forget the whole lot, because this whole argument is utter nonsense. Ask yourself - is this really how people work? And if you agree it's not, then you need to read Steve Keen's book "Debunking Economics" in which he demolishes neoclassical economics in its entirety. Good luck with you degree! :-)

[@chigozieamadi1843]

Can you please answer this question for me- Show that the marshallian demand curve is a single value function of income and price

[@jayMbodybuilding]

i still dont understand this shit till this day after so many economic classes but thanks broski

[@Niglnws]

It is like x1 price decreased, so i can have the same utility but at less price that is good. (Substitution effect).
But why should i stay at that utility i have more purchasing power or more money so lets get a higher utility. (Income effect).
Right?

[@Niglnws]

And at the subsitution case, decrease x2 to increase x1 that is why it is called substitution.
While at the income case, we just increase x1 and x2 to reach higher utility using the income or purchasing power that is why it is called income effect.

[@DarthVader___]

+Policonomics what is the difference between Engel curve and income consumption curve?

[@Policonomics]

Dear Aditi Rawat,
The income consumption curve joints point of optimal consumption of bundles of goods given an income. In this case, consumption of good X is drawn in the X-axis and consumption of good Y is drawn in the Y-axis. For instance, let's say for income=I1 we have a consumption of 2X,3Y, and we call that point A. Then let's say for I2 we have 5X,7Y, and we call that point B. And so on. The income consumption curve joins point A, B, C, D, etc.
The Engel curve can be derived from the incoe consumption curve, but they are not the same thing. The Engel curve shows consumption of one good (X-axis) at different levels of income (Y-axis).
Thanks for watching!

[@user-oo8tc5yf2j]

Im still confused, what happen to the curve for X2?

[@thePrahoable]

I still cannot get it pretty good why do you draw the red line. Could you please write it here more easily understandable?

[@ManiJaka-ic3vi]

Please clear explanation

[@wasixsunil]

Refered a book

[@goyaldev0911]

why does hicksian meet marshallian at point a

[@arshadsalamat5917]

its easy way of learning too good poly.

[@Policonomics]

Thanks for watching Arshad!

[@masteraisyah8587]

i hope you could speak slower,hmm