This seemingly simple video is a gem. Normally they don’t teach this intermediate step, so it can be very confusing how to interpret relative prices. Even though they teach you it is in terms of goods, it can be still confusing why it is for every x, not for every y. Thank you professor!
I'm studying economics in Korea and was having a hard time understanding this concept... I couldn't find any satisfying(easier) explanation in other websites, but your video helped alot. Thank you for giving specific examples
thank you so much for taking the time to break it down. I didn't pass my micro-economics exam due to the fact that I didn't understand this concept which was needed to understand international trade based on opportunity costs. So now that I'm taking a macro-economics exam in a couple of weeks about relative prices (among other things) this was of great help and exercise to help me pass my re-exam micro-economics in august.
🤔The graph drawn at 6:35 doesn't represent the formula y = x/2. That would be a graph starting at (0, 0) going up to the right. He has drawn a graph for y = -2x + 200, and drawn points that say when the price of X = 0, price of Y = 200 and when price of X = 100, price of Y = 0 which is not the case here.
The expression at 6:35 is the **slope** of, say, a budget constraint. For example, a budget constraint would be: income = (Px)X + (Py)Y , where the right side is the expenditure on the two goods X and Y. The slope of that equation if you solve for Y: -(Px/Py)
As Px is price(nominal price) of x is $10/x said as 10 dollars for every x Same goes for Px/Py said as relative price of x wrt to y is 2y/x or 2y for every x I.e we get 2y in the same money we get 1 x
thank u very much. i like how u related relative price to production possibility curves. is relative price the same as opportunity cost and marginal cost?
@@momoore1957 help me at this question kindly.. If a gallon of gasoline costs$1.10 and a can of dog food costs $0.45,then what is the relative price of dog food in terms of gasoline?
This seemingly simple video is a gem. Normally they don’t teach this intermediate step, so it can be very confusing how to interpret relative prices. Even though they teach you it is in terms of goods, it can be still confusing why it is for every x, not for every y. Thank you professor!
I'm studying economics in Korea and was having a hard time understanding this concept... I couldn't find any satisfying(easier) explanation in other websites, but your video helped alot. Thank you for giving specific examples
thank you so much for taking the time to break it down. I didn't pass my micro-economics exam due to the fact that I didn't understand this concept which was needed to understand international trade based on opportunity costs. So now that I'm taking a macro-economics exam in a couple of weeks about relative prices (among other things) this was of great help and exercise to help me pass my re-exam micro-economics in august.
Great explanation Dr. Moore
thank you so much for this great explanation. You have no idea how much this helped me!
You just made my day Sir, thank u a lot..from Morocco
Wow, this is exactly what I was struggling on and what I wanted to understand!! The best professor in the whole Universe I suppose! Thanks a lot!
Simple and clear. Thank you, Dr. Moore.
🤔The graph drawn at 6:35 doesn't represent the formula y = x/2. That would be a graph starting at (0, 0) going up to the right. He has drawn a graph for y = -2x + 200, and drawn points that say when the price of X = 0, price of Y = 200 and when price of X = 100, price of Y = 0 which is not the case here.
The expression at 6:35 is the **slope** of, say, a budget constraint. For example, a budget constraint would be: income = (Px)X + (Py)Y , where the right side is the expenditure on the two goods X and Y. The slope of that equation if you solve for Y: -(Px/Py)
Thanks so much, you simplified what it took my prof about 20-30 minutes of non sense into 8 mins of pure logic -_-
great teaching
thanks alot my friend.
Thank you Mr. Moore!
such a nice way to explain things, great video!
As Px is price(nominal price) of x is $10/x said as 10 dollars for every x
Same goes for Px/Py said as relative price of x wrt to y is 2y/x or 2y for every x
I.e we get 2y in the same money we get 1 x
Awesome. Very helpful indeed.
thanks for the simple explanation
So great teaching
Thank You!
thank you professor
Thank u ,sir.It helps me a lot
Thank you so much! This is soo detailed!
thank u very much. i like how u related relative price to production possibility curves. is relative price the same as opportunity cost and marginal cost?
In a competitive market equilibrium: relative price = opportunity cost of buying another good for a consumer = relative marginal cost
@@momoore1957 help me at this question kindly..
If a gallon of gasoline costs$1.10 and a can of dog food costs $0.45,then what is the relative price of dog food in terms of gasoline?
5:20
you are my hero
4:06 "the dollar signs cancel out." That's not good professor 🙄
why not? it's true... relative prices don't express a price in currency but in the amount of goods (ratio wise)
Good video. One side note, your whiteboard shaking while you're writing is quite loud in the recording. Takes away from your good video.
Sir 👌🫡❤
You’re a life saver 🥹🥹🥹