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!
@@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!
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.
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
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.
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.
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,
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 !
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???
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
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?
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!!!
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.
@@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
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.
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).
This viedo just saved my Econ grade!!
this is so easy and staight forward, why does textbook mess up everything and make them so complicated???
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!
l love you,I love you,I love you
Why do professors make this sound sooooo complicated. This is so straight forward thank you. ❤
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.
Himadri Nag Yeah I was wondering about that as well!
I feel like this is more of a CES method.
@@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!
Why did you differentiate with respect to X for du/dy? I thought it would have been .5y .5-1, with X held constant
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.
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
This working is actually very straightforward and helpful. The textbooks on the other hand, not so much
I appreciate your comment!
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.
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.
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,
Show me result
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 !
I love you from the bottom of Mariana Trench
Thank you so much!
Not a Cobb-Douglas, exponents must add to 1
The exponents do not need to sum to 1; each exponent only needs to be a positive constant.
NO!!!!!!!!!!!!!!!! utility is ordinal, therefore the exponents does not need to add up to 1!!! You Prof should have told you!
I still do not understand why he differentiated with respect to x for du/dy. It makes this whole thing less intuitive to follow.
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.
i cannot comprehend why my lecturer make it so hard to understand, you are truly a saviour, may god bless you sir
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???
Great video thank you for sharing this knowledge I can now better my economics grade
You just saved my whole midterm. Than you!
Ohooooo thanks have understood this it's very simple I used to struggle alot but now everything is very simple ❤❤❤❤
Thanks for the heads up😪
thank youuuuuuuuuuuu your the best saved me thank you thank you can you do example like that on income and substitution effect
You're the best! Thank you for helping me finally complete my assignment!
Very good explanation. Hardly good quality videos are uploaded with good explanation.👍
Thanks!
Thank you so much, my university lecturers and textbooks have a combined utility of 0.
it takes my long-winded professor an hour and a half to explain these concepts.....thank you
Thank_You so much
Very helpful
Thank you, this was very helpful.
really easy to understand, thank you! And some white noise for free :D
Most important lesson.thank you soo much
You are very welcome!
Can i share a question and you do it for me
Thank you so much 🙏🏼🙏🏼🙏🏼. ❤️
please show me this solution U= -4Q2+80Q
Need help. Why didn't we multiply everything with 4 at 4:06
I like the way you lecture
I appreciate that. Thank you!
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
This video should help:ua-cam.com/video/ELxWo0esLzo/v-deo.html
Another classic Chuck Fin massive W
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
error @ 4:31 4* .25x-.75y.5= x.25 and 4y.5 not just y .5
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
@@jpratt8676 but he never actually multiplies with the 4 on the left side. My question is why doesn't cross multiplying not work.
So you don’t need a Lagrangean for this ?
No, only if your instructor requires it.
simple. Thanks
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?
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!!!
very useful, but from where did you got that cobb douglas equation, how do you calculate it?
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.
how do you get the beta and alpha though still very confused on this equation.
@@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
Just saved a brother
That is great!
Thank you so much!!
You are welcome!
Thank you so much man🇺🇬
awesome. thank you very much
i dont understand why did we have to multiply by 4 and the exponents are not equal to 1
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.
This solution looks a little confusing. COBB DOUGLAS WITH THE EXPONENTS NOT UP TO 1.
There is no requirement for the exponents on a Cobb-Douglas function to sum to 1. The exponents only need to be positive.
do you know the difference between cardinality und ordinality look it up!
Thank you very much
Thank you 😊 you have helped me alot
Absolute legend!!!
I'm so happy, you helped me so much..
Tnxs🙏🙏
thank you
Superb 🔥
Thanks bra
thank god, your video just saved me.
Thanks man
thanks lad
SAVIOR!
i love you) thank you
You save me life
thank you so much yes yes yes
BETTER THAN THE TEXTBOOK
No!!!! Because the why is missing! It is just stupid wicked calculation, with no deeper inside!
Thank you sooooo much
Thanks man!!!
Hi! why is it -.75?
The exponent on the X variable after the derivative is X^(0.25 - 1), which simplifies to X^(-0.75)
Thank you. Also, this video really helps me. ❤️
I thought U = square of x*y ?
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).
thanks
Gud explain sir .....👍thnx