1:25 Accounting Profit (Revenue - Explicit Costs) != Economic Profit (Revenue - Explicit - Implicit(Opportunity Costs) 2:40) Business calculate their potential revenue and their costs production, including implicit costs, to make informed decision. Companies in competitive market do not make much profit (no economic profit) 2:44 Normal Profit - minimum level of economic profit a company needs to stay in business. 3:25 Total Cost = (Variable Costs - 3:51) + (Fixed Costs - 4:00) Average Cost - 4:12 Average costs fall with more units of production. Economies of Scale - 5:20 Profit Maximizing Rule - 6:10 :- Continue to produce until marginal revenue-6:25 is greater than marginal cost-7:15 Law of Diminishing Marginal Returns- 8:05 Sunk Cost - 9:25
I struggle to ignore sunk costs. I can't stop thinking about the money and time wasted. Even for little things like when I bought a pen for an exam and then realising pencils were only allowed
Duvee Hie keep the pen for another exam. Sunk costs are not always lost forever, just think of them as potential future investments and try to focus on everything else
I can't even explain how helpful I find these videos! I always watch after I finish reading my chapters from the micro and/or macro book and this really makes things easier to remember. So thankful! :D
Hey Jacob and Andriene, and all of the crash course team, keep up the fantastic work! I love these videos. Not only are they super accurate, but they're so fun to watch. I have a suggestion though. You guys should do another specific, real life example video, like the 2008 financial crisis. I suggest you do one on Standard Oil and John D. You could highlight so many real world econ concepts with Standard Oil and really demonstrate how these concepts matter -- I see that your next video is on monopolies... And Jacob, your side channel is good too, although the way in which the videos are categorized is a bit messy, but that may just be youtube. Awesome work!!
a young scotchman comes home and says proudly to his father: I saved a lot of money by running behind the bus. "Stupid lad!" his father blurts. "by running behind a taxi, you would have saved a lot more".
@@thabangtukule999 Running cost $0. For example let's say the bus would cost $2 and the taxi would cost $20. The father is saying that he is "saving" more money when he doesn't ride the taxi than when he doesn't ride the bus. And in the moment you might say the you do save more, but in reality you are spending $0 no matter what you run behind. If you spend $0 either way, there is no actual saving when comparing which vehicle you run behind.
Love the last few examples of studying and relationships on sunk costs. I've been kind of struggling to connect Economics with my current life experiences but these two examples make it more relatable and fun! Thanks for sharing the knowledge :)
@4:17 “the average cost of producing most things *initially* falls as more is produced” @7:10 “the more you make, each additional unit is *eventually* gonna cost more” I had to write them down side by side to “see” the difference lol!
One thing you forget - fixed costs are rarely fixed. Rather, they are fixed to a capacity, a stepping cost. If you buy one pizza oven, you might be able to produce 1000 pizzas an hour, that oven is your fixed cost. But your capacity is limited to 1000 pizzas per hour. So you have to buy a second oven later if your demand rises. Fixed costs therefore increase.
yeah your analysis are so true.. when he bought is first oven he was at the short run with a plant size capacity to produce 1000per hour... as the demand increases in the market since the capacity is utilized already the firm needs to vary its capital in order to meet up with his demand... hence the firm is in the Long run and no Longer in the Short run where cost is fixed
you should create a mob, where you're the only one with access to mint related snacks, and if someone doesn't want to pay for their tic tacs or orbit gum, then you hire the school bully and pay him in Altoids, the most valuable mint
DontReadMyNameMarvin yes, they will cover ethics there, yet ethics is large enough for its own series. It won't surprise me if they skim over it on philosophy. In fact I think that both economy and philosophy are making the case for CrashCourse Ethics.
I really enjoy this channel. I have been blessed to help it continue by giving towards its future existence. I run a small business, and enjoy somewhat formally learning the thoughts that have enabled myself to grow into the location in life I currently have placed myself. I believe that this kind of resource can help others that have interest in being in business at a "micro" level understand the reasons for their decisions and enforce positive beliefs. Stan and Hank are a blessed to have spawned a maybe over looked, but very useful resource. To every buddy at Crash Course thank you.
Excellent snap shot shows on all economic topics. Although my speciality is not economics, i'm sold immediately each time I watch and want to watch more. You seem to use 5 steps to break down your topic descriptor....Intro, presentation, story, Close and a rehash as a closure for understanding. Great work and please, continue with the mitigation of educational costs by keeping it free!!!!!!!!!!!
1. I love this channel. So much. It is such a great concept. 2. I love the little animation Easter eggs! Like at 8:30 with Craig and Hank and John too? I think one is John. I for sure see Craig and Hank!
I had a test about it today (still awake so its today :D) for the description part of the single costs, i would have wanted a bit more visualisation, some other kinds of graths for example, because the talk alone doesnt get you to understand things fast enough for a youtube video... just a tip for the future^^
This was probably the best Economics episode they've done. "Like a liberal arts education, its not where you go to learn any specific job, but it can help you see the big picture". That's a good justification for the liberal arts, given all the bad rep it gets as "not being a job creator". Economics as a generalized version of business administration functions like finance or marketing does give structure to the lower more specialized areas of business, without which its like walking in the dark and very 'buzzword' driven, which is what modern business education has become, its sad. Business schools are so fixated on the nuts and bolts of business that they forget that business occurs within a context; both political and economic. I think every business graduate ought to study at least some economics, and ideally another liberal arts field like politics or philosophy.
The profit maximisation point where MC is equal to MR just applies to Monopolies. I think you should explain Perfect compition and for them, is Marginal Cost equals Price (or Demand)
One thing you forget - fixed costs are rarely fixed. Rather, they are fixed to a capacity, a stepping cost. If you buy one pizza oven, you might be able to produce 1000 pizzas an hour, that oven is your fixed cost. But your capacity is limited to 1000 pizzas per hour. So you have to buy a second oven later if your demand rises. Fixed costs therefore increase. Thus this video analyse us that accounting profit is much easy to earn rather than economic profit. (Accounting profit = Total Revenue - Total Cost) (Total Cost = Fixed Cost + Variable Cost)
2:48: Technically, it believe positive economic profit is undefined and a misconception. The highest possible economic profit you should theoretically be able to get is zero, since you deduct your opportunity cost (your current profit) from your current profit to get zero.
The best example of sunk costs I like to use is that of a movie ticket. Sure, you paid the $14 to see the movie, but if 10 minutes in you can tell that the remaining 110 minutes of movie is going to be so terrible that you'll hate staying, then you get up and leave the theater and go do something else with that 110 minutes that you'll love doing.
Brilliant and with serious social implications. Why is Hoboken NJ full of bars? because , when the town began to recover, the first people there opened bars around the train terminal. Everyone i=on the East Coast decided to build a bar next to the successful bar and revenue from each went down.
Great video! I'm curious, and this may be more of a business question. But, if we continued with the example of that rainbow pizzeria, how would they determine the ideal number of pizzas to make, say per month? What other factors would go into the decision? The size of the town would determine the market size. The number of competitor pizzerias would cut into profits, especially if their pizza were a higher perceived value. location would be a big deal. Then there's the question of over estimating and losing money on ingredients that have to be tossed. And, so far as allure, possibly having long lines and not enough pizza might drive up demand further? How can they manipulate customers to increase sales? I'd love to see a mathematical equation for this.
You covered cost but not AC/DC. I looked forward to you mentioning the belt but I guess it is just a joke for who knows what it means. Also ''breakdown'' as a new method to grab atention halfway? It worked for me.
+Ben J You're fortunate to have never been in an unhealthy relationship. Sunk Cost Fallacy can get people killed when it comes to relationships. It nearly cost me $4000, my family, friendships, and probably years of physical and emotional abuse. The "I've put so much time into it" thing is a very dangerous thought process.
This is literally my entire MicroEcon semester. I physically checked every page of my notes, and this is everything.
1:25 Accounting Profit (Revenue - Explicit Costs) != Economic Profit (Revenue - Explicit - Implicit(Opportunity Costs) 2:40)
Business calculate their potential revenue and their costs production, including implicit costs, to make informed decision.
Companies in competitive market do not make much profit (no economic profit) 2:44
Normal Profit - minimum level of economic profit a company needs to stay in business. 3:25
Total Cost = (Variable Costs - 3:51) + (Fixed Costs - 4:00)
Average Cost - 4:12
Average costs fall with more units of production.
Economies of Scale - 5:20
Profit Maximizing Rule - 6:10 :- Continue to produce until marginal revenue-6:25 is greater than marginal cost-7:15
Law of Diminishing Marginal Returns- 8:05
Sunk Cost - 9:25
Prajwol Gyawali thank you!! :)
Best crash course ever in my opinion.
+hoarf There is nothing political about microeconomics lol
+hoarf
What happen to John Green and stan?
+John von Shepard I'm not a 13 year old girl so I don't care about Jhon Green and Stan's subject was not very insteresting in my opinion.
I struggle to ignore sunk costs. I can't stop thinking about the money and time wasted. Even for little things like when I bought a pen for an exam and then realising pencils were only allowed
Duvee Hie keep the pen for another exam. Sunk costs are not always lost forever, just think of them as potential future investments and try to focus on everything else
If used that pen again that's not a sunk cost.
Love this channel
+Rob Scallon you here? wow
+fo shizzle I've never found him on one of my subscribed gaming channel.
Rob Scallon
Rob Scallon
Rob Scallon me too.
I can't even explain how helpful I find these videos! I always watch after I finish reading my chapters from the micro and/or macro book and this really makes things easier to remember. So thankful! :D
Hey Jacob and Andriene, and all of the crash course team, keep up the fantastic work! I love these videos. Not only are they super accurate, but they're so fun to watch. I have a suggestion though. You guys should do another specific, real life example video, like the 2008 financial crisis. I suggest you do one on Standard Oil and John D. You could highlight so many real world econ concepts with Standard Oil and really demonstrate how these concepts matter -- I see that your next video is on monopolies...
And Jacob, your side channel is good too, although the way in which the videos are categorized is a bit messy, but that may just be youtube.
Awesome work!!
a young scotchman comes home and says proudly to his father: I saved a lot of money by running behind the bus. "Stupid lad!" his father blurts. "by running behind a taxi, you would have saved a lot more".
hate to be the guy who doesn't get it lol
I don't understand the logic
@@thabangtukule999
Running cost $0. For example let's say the bus would cost $2 and the taxi would cost $20. The father is saying that he is "saving" more money when he doesn't ride the taxi than when he doesn't ride the bus. And in the moment you might say the you do save more, but in reality you are spending $0 no matter what you run behind. If you spend $0 either way, there is no actual saving when comparing which vehicle you run behind.
Thank you Stan for "Breaking it Down!"
You're the real MVP!
The best part of the blooper at the end is hearing someone saying: «again!»
Love the last few examples of studying and relationships on sunk costs. I've been kind of struggling to connect Economics with my current life experiences but these two examples make it more relatable and fun! Thanks for sharing the knowledge :)
@4:17 “the average cost of producing most things *initially* falls as more is produced”
@7:10 “the more you make, each additional unit is *eventually* gonna cost more”
I had to write them down side by side to “see” the difference lol!
Guys you're awesome. Keep doing what you're doing we business students and future economists appreciate it. :D
One thing you forget - fixed costs are rarely fixed. Rather, they are fixed to a capacity, a stepping cost. If you buy one pizza oven, you might be able to produce 1000 pizzas an hour, that oven is your fixed cost. But your capacity is limited to 1000 pizzas per hour. So you have to buy a second oven later if your demand rises. Fixed costs therefore increase.
True, but they are these costs are considered Fixed in the Short Run which is where a lot of microeconomics takes place.
+99thTuesday cost of maintenance is not fixed.
True. I would also add that, in the long run, anything and every thing becomes a variable cost.
yeah your analysis are so true..
when he bought is first oven he was at the short run with a plant size capacity to produce 1000per hour... as the demand increases in the market since the capacity is utilized already the firm needs to vary its capital in order to meet up with his demand... hence the firm is in the Long run and no Longer in the Short run where cost is fixed
"become an entrepreneur"
Establishes tic tac empire at school
you should create a mob, where you're the only one with access to mint related snacks, and if someone doesn't want to pay for their tic tacs or orbit gum, then you hire the school bully and pay him in Altoids, the most valuable mint
@@geeway5923 lol what the what xD
10:35 just the enthousiastic smile on the dude's face. Makes my day
Clifford!! I bought ur app ur the reason I passed macro and micro economics!
which app
The path to CrashCourse Ethics is open
+Alfonso J. Ramos (theraot) I think they'll take care of it in CC Philosophy, as it is a part of just that. I'd love to see that though.
DontReadMyNameMarvin yes, they will cover ethics there, yet ethics is large enough for its own series. It won't surprise me if they skim over it on philosophy. In fact I think that both economy and philosophy are making the case for CrashCourse Ethics.
love the channel!
cant help but notice that Jacob doesn't blink at all..
Great channel.
Damn it, Jacob, you weren't supposed to take "Crash" _literally._ -_____________-
XD
I really enjoy this channel. I have been blessed to help it continue by giving towards its future existence. I run a small business, and enjoy somewhat formally learning the thoughts that have enabled myself to grow into the location in life I currently have placed myself. I believe that this kind of resource can help others that have interest in being in business at a "micro" level understand the reasons for their decisions and enforce positive beliefs. Stan and Hank are a blessed to have spawned a maybe over looked, but very useful resource. To every buddy at Crash Course thank you.
Excellent snap shot shows on all economic topics. Although my speciality is not economics, i'm sold immediately each time I watch and want to watch more. You seem to use 5 steps to break down your topic descriptor....Intro, presentation, story, Close and a rehash as a closure for understanding. Great work and please, continue with the mitigation of educational costs by keeping it free!!!!!!!!!!!
7:21 Behind the left side of the restaurant Spongebob was fueling them with the power of imagination
This episode was very detailed and well done, good work :D!
That Life advice at the end hits hard for me:)
I have an exam in 2 hours LET'S GOOOOOOO
Excellent video! I am a visual learner so your videos help me tremendously. I will be sure to donate, and keep up the excellent work!
That was a solid piece of relationship advice.
Jacob's ACDC belt buckle collection is insane.
9:15 yeah im staying up rn to learn for my exam sobbb
I'm in highschool, and I found this very helpful.
This channel really helps
genuinely helping me so much, right now im doing an extension subject (starting it two years early ) please do more of these !
Wow I hated economics last year, and now its my fav
Thanks CrashCourse!!
Best video ever on cost of production. Thank you so much for creating with magical level of creativity. Adore your work so much 😊❤😘
1. I love this channel. So much. It is such a great concept.
2. I love the little animation Easter eggs! Like at 8:30 with Craig and Hank and John too? I think one is John. I for sure see Craig and Hank!
I had a test about it today (still awake so its today :D) for the description part of the single costs, i would have wanted a bit more visualisation, some other kinds of graths for example, because the talk alone doesnt get you to understand things fast enough for a youtube video... just a tip for the future^^
+TheNefari We focus on the big picture stuff at Crash Course. If you are interested in learning all the cost curves you can check out my channel
why were you up at 1 an
Have u never had 2 cram 4 a test?!
nah i never bother
This could not have been explained any better. Thank you Crash Course!
This is one of your best episodes. Thanks!
I'm in my first year of IB and ur channel helps me go over what i learnt and stuff. I like the tempo of this one and it's really cute too lol Thank u!
You two are so great! Seeing this in 2023 ❤
BEST TEACHERS *EVER*!!!
TOO MANY COOKS!
+Darkrai's Victum lol
+Darkrai's Victum SPOIL THE BROTH
+Darkrai's Victum YOU MUST CONSTRUCT ADDITIONAL PYLONS!
read that as too many cocks, thanks for the laugh mate!
@@tygrande3127 same
"AGAIN???" amazing blooper and video, I love this channel.
I will surely tell them that it started from here! Thanks a million.
The notion of opportunity cost might be my favorite in Economics. I think in those terms all the time.
Great job! It doesn’t profit me anything telling you this ;) your always fun to watch and I learn a lot with you.
Love the pictures and examples, they make everything so much easier. Thought bubble is the best!
2 years later, and I am watching! thanx guys!
I learnt a great deal from this channel for my final exam. THANK YOU SO MUCH!!
this is the best channel WOWW
"It takes a lot to make a stew..."
+sinecurve9999 I was thinking the same, I had to hold myself back from bursting into song.
+sinecurve9999 Which one do you hear in your head? In my head it goes straight to the slowdown near the end when Snarf is crawling on the floor.
sinecurve9999
This was a really informative episode. Thanks :)
The pizza chef in the pics makes cooking pizza epic 😁
I would definitely say that basics of my economics learning started right here .👍
this crash course is gunna help me pass my final!!
This was probably the best Economics episode they've done. "Like a liberal arts education, its not where you go to learn any specific job, but it can help you see the big picture". That's a good justification for the liberal arts, given all the bad rep it gets as "not being a job creator". Economics as a generalized version of business administration functions like finance or marketing does give structure to the lower more specialized areas of business, without which its like walking in the dark and very 'buzzword' driven, which is what modern business education has become, its sad. Business schools are so fixated on the nuts and bolts of business that they forget that business occurs within a context; both political and economic. I think every business graduate ought to study at least some economics, and ideally another liberal arts field like politics or philosophy.
The profit maximisation point where MC is equal to MR just applies to Monopolies. I think you should explain Perfect compition and for them, is Marginal Cost equals Price (or Demand)
I'm going to start using economics in my relationships
One thing you forget - fixed costs are rarely fixed. Rather, they are fixed to a capacity, a stepping cost. If you buy one pizza oven, you might be able to produce 1000 pizzas an hour, that oven is your fixed cost. But your capacity is limited to 1000 pizzas per hour. So you have to buy a second oven later if your demand rises. Fixed costs therefore increase.
Thus this video analyse us that accounting profit is much easy to earn rather than economic profit. (Accounting profit = Total Revenue - Total Cost)
(Total Cost = Fixed Cost + Variable Cost)
I love this Chanel
Erin Hayes Chanel s a makeup company. You meant ****Channel right?
exam in 1 hr time to start
I love Crash Course.
2:48: Technically, it believe positive economic profit is undefined and a misconception. The highest possible economic profit you should theoretically be able to get is zero, since you deduct your opportunity cost (your current profit) from your current profit to get zero.
the two girls at 7:49 are definitely ilana and abbi from broad city!!! so cool they made a cameo in this lesson :)
YOU GUYS SHOULD DO ORGANIC CHEMISTRY!!
PLEASE HELP
Fantastic! Thank you so much for this....#24
Im loving this channel. Nice production guys.. I will definitely confess in the interview with FOrtune 500.
Favorite crash course!!!!
I learnt more in 10 minutes than the past hours!
The best example of sunk costs I like to use is that of a movie ticket. Sure, you paid the $14 to see the movie, but if 10 minutes in you can tell that the remaining 110 minutes of movie is going to be so terrible that you'll hate staying, then you get up and leave the theater and go do something else with that 110 minutes that you'll love doing.
that ACDC belt buckle
Do a series on Business, and marketing!
Thanks for the course!
I'm a have to watch this 20 more times. I understand it but then I don't. Lol.
Omg.. love this channel 💗💗💗
i just understand all those theory and law after i start my business.. hahaha
love how much mileage you guys get out of the footage of the wine-drinking retired couple
+Greg Biché That footage is better than Star Wars. I could watch it all day.
thank you sir for helping me in economics
6:21 STAN!
What a kickass belt!
i'm taking IB business and this video saved my life lol
hehe...the boys and girls at 'thought bubble' not at stereotypical, especially the unlikely ending to the clip. love it...
Thank you guys sun cost is very new funny word to me but I really understood the meaning
Learned a lot. Thanks crashcourse. :)
Brilliant and with serious social implications. Why is Hoboken NJ full of bars? because , when the town began to recover, the first people there opened bars around the train terminal. Everyone i=on the East Coast decided to build a bar next to the successful bar and revenue from each went down.
Great video! I'm curious, and this may be more of a business question. But, if we continued with the example of that rainbow pizzeria, how would they determine the ideal number of pizzas to make, say per month? What other factors would go into the decision? The size of the town would determine the market size. The number of competitor pizzerias would cut into profits, especially if their pizza were a higher perceived value. location would be a big deal. Then there's the question of over estimating and losing money on ingredients that have to be tossed. And, so far as allure, possibly having long lines and not enough pizza might drive up demand further? How can they manipulate customers to increase sales? I'd love to see a mathematical equation for this.
You covered cost but not AC/DC. I looked forward to you mentioning the belt but I guess it is just a joke for who knows what it means. Also ''breakdown'' as a new method to grab atention halfway? It worked for me.
Like there belt Mr. Clifford
I appreciate the blooper thrown in at the end. :D
Been waiting on the monopoly episode since this course started lol
Amazing video. Thank you very much..
really nice episode, liked it!
Great video!
That 'Break It Down' tho 😂😂😂
I saw your little SpongeBob Squarepants at 7:23 when you said imagination! Very clever :)
I love this channel. It's so useful :)
you're great keep going doing this
Thnks a lot ... !
u guys r really doing a good job !
bless u all :)
Oh yeah, apply economic principles to your love life, great idea.
Otherwise great video.
Small insignificant rough patch in your 20 year marriage? Get out of there! - America
+Prestige Potato buy that isn't what was said at all.
+Ben J You're fortunate to have never been in an unhealthy relationship. Sunk Cost Fallacy can get people killed when it comes to relationships. It nearly cost me $4000, my family, friendships, and probably years of physical and emotional abuse. The "I've put so much time into it" thing is a very dangerous thought process.
Thank you🌷