3. Budget Constraints and Constrained Choice 

Can u recommend this type of lec for macroeconomics? Pls

​@@SakshiSingh-xq1ze there is one on RU-vid from another big American school.

Thank you so much :) Very nice of you!

@@arrowmouse this ratio seems low, here in India top stem universities (IITs) have 2,000,000 + aspirants and only 10k get in 😂

Their faculty vacations on Epstein’s island. I would never give them my money

@@yeahwhat6363 The quality of the Applicants are not the same lol

@@hainamtran2232 well said

You’re correct

what uni did you choose?

Lies again? Bet Clic Acura

Can u recommend any macroeconomics lecture series?

​@@SakshiSingh-xq1ze Principle of macroeconomics by Missouri State University

Really in case of the previous lectures also so inculcating that generates so many models in my mind solving the crude level industrial problems.

im looking for them too

Are you on Facebook

Same. Really like these free lectures from MIT. Thankyou. They don't grant certification on MITopencourseware, but the free learning for anyone that wants to and get education from MIT is just fantastic.

Yo I am addicted to isekai mangas and webtoons and been using all my concentration skill to focus on this class Yours is good addiction

Look for Richard Thaler and Cass Sustein. They coined the term "libertarian paternalism" and it's well used in behavioral economics as a whole. 😊

In case of the optimization of life's own temporal value,the most optimistic way in the risk dissoluted scenario of the macroeconomic behaviour,it's really the inverse utility of paternalism if we don't accept the indifference to the smoking habit,the utility of other habits like overeating or any kind of portion that affects the micro temporality creates a long difference in the human behaviour. In that context one indifference of temporality comes in my way of thought as the technical improvement in the world of cheap and sustainable technical imposition to increase the micro utility to support the entire product mix would be a great strategy concentric in case of the product generation.Hence a complete inversion of inverted utility to the actual utility function hence,the same is here the increase in marginal utility by relinquishing the smoking habit would be far more better replacement of everything having high utility function including a saviour in the irrational behaviour to the human being the high penetratiin of sustainability.

MRT is the ratio of market prices of two goods. It is independent of your income or budget constraints. The decrease in income will in some combination lower both the amount of cookies and the amount of pizza. However, the exact combination by which pizza slices and cookies get lowered depend upon your utility function which ultimately makes your indifference curve.

"You're willing to give up 2.5 P for 1 C" is correct. If you look at the graph (29:18) more closely, you will see that at point A, the value at x axis is 2, but also the value of y axis is 5. So basically, you are willing to give up 5 pizzas for 2 cookies which is same us giving up 2.5 pizzas for 1 cookie.

it might be arising out of the budgetary notion in case of planning or strategizing for the optimal output or utility in sense of personal micro Economics to derive the high value of constrained budget of the whole in case of the value generation of the industrial output.

Here maybe he's talking about the attainable and non attainable combinations where initially the dots were up to previous budget line but now they are within new budget line(black ones) and the remaining between new and previous budget line (red) are not attainable.

It is from derivation of the squareroot like the derivation of squareroot of xy is (1\2 times square root of xy )times the derivation of xy itself.....i am not sure if I explained it in understandable way but I suggest you to derivate the function by yourself first and crosscheck it

I think it comes from the fact that the Pizza is worth twice as much as the cookies so P_c/Pp = 0.5. Not sure exactly but that's what it seems.

dU/dP = d(root(PC))/dP = 0.5*C/root(PC) Its just differentiation

@@shivanshsubramanian5525 where's the 0.5 from? and why 0.5*c／root(pc)....thanks..

@@user-ze1tc1ur9p The derivative of a function (ax)^n is a*n*(ax)^(n-1) where a is a constant. The square root of PC is equivalent to saying (PC)^(1/2) or (PC)^0.5, so if you're deriving with respect to P, P is your x, C is a, and 0.5 is n, so the derivative would be C*0.5*(PC)^(0.5-1) or 0.5*C*(PC)^(-0.5). x^-n is equivalent to 1/(x^n), a negative power just means you move it to the denominator, so you get 0.5*C/(PC)^0.5, and again, x^0.5 is the same as square root of x, so finally you're left with 0.5*C/squareroot(PC). If you do it with respect to C, C is your x instead, you get 0.5*P/squareroot(PC). dU/dP means derivative of U w/ respect to P, dU/dC means derivative of U w/ respect to C.

@@davidbarroso8523 thank you so much. I was confused but I see now

@@ahmettayyipaydin6925 thank you so much broo i just wasnt thinking of taking c as constant and your explaination cleared it up

I didn't go to MIT, but when I took Microeconomics we did all the math in our quiz sections and not during the lecture.

@@rm2kmidi do you know how can I get quiz that they did?

@@lucayan7982 not a quiz. Quiz sections are smaller class groups you attend, usually lead by a TA. So the students would be learning this on non-lecture days.

@@lucayan7982 "Quiz Section" is what we call the smaller breakout classes in large lecture classes at universities in the US. It doesn't have anything to do with quizzes or taking tests. Typically you attend lecture three times a week and attend quiz section twice a week. I was just explaining that the math-oriented parts of this class were likely all discussed in smaller groups with the teaching assistant and probably wont be on video. At least that's how it was when I was in school.

@@rm2kmidi thank you for the clarification

Can u recommend series lecture of intermediate macroeconomics ?

@@SakshiSingh-xq1ze macroeconomics k liye nptel k kaafi ache hai lecture

Wow if I can ask what made you switch from architecture to economics?

Recitations are not available for the course. To see what we do have, visit MIT OpenCourseWare at: ocw.mit.edu/14-01F18. Best wishes on your studies!

@@mitocw tnx.

​@@mitocw QUESTION: minute 28.48 > " you're willing to give up 2.5 p for 1 c" is incorrect right? Looking at the graph (minute 29.18) the indifference curve looks like that you're willing to give up 2.5 p for 2 c as the interval on the x axis is not 1 but 2. Can someone either tell me that I am right, but more likely explain why I am wrong?

If you were that high school student, we would tell you to ignore the budget constraints and recommended you apply anyways. 🙂 MIT is need-blind and full-need. If you were accepted, MIT would make sure you could afford MIT tuition... even if they had to fully cover it. Visit sfs.mit.edu/undergraduate-students/the-cost-of-attendance/making-mit-affordable/ for more info.

@@mitocw this comment made my day today! :)

the question actually translate into how to calculate dP... I forgot all my learning on derivatives of that part.

Your question is hard to understand, but I can explain that because the slope is the ratio of the quantity of cookies to pizza, changing the slope means you change the quantity of cookies or pizza or both (see algebra)

he is saying that the budget changes (since your disposable income decreases) but the proportion of trade-off between two products remains (since the price of each type remains and the value of each type for you is the same. i.e. the marginal substitution for you is the same). you see the parallel shift of the budget lines but the slope remains.

These equation is quite tricky to make the indifference in the buying behaviour of the product in case of obtaining diligence of his entire family. It seems the Economics is tremendously the unitasking.

Same lol

Think so too. They probably do the multivariable calculus in the side-lectures

hey hey. Because government gave the poors the debit card which can be only used for food, the people cannot use this money for shelters. Therefore, people cannot spend any money to shelters and now it has restricted in that 5000

He differentiated root p*c, which is equal to 0.5 *C or P( depends on what is taken constant)/root of P*C

Probably something to do with structural inequality issues, for example an insurance firm may offer insurance to rich people, R or poor people, P. When P takes out insurance on their cheaper car, the risk of it breaking down are higher and therefore their insurance costs will be higher as a proportion of their income. This could take away P's ability to increase their wealth because the insurance costs eventually wear away their initial endowment. If the group used their money to buy cars to double their wages, they would not be able to afford good cars and thus they would be subject to high insurance costs, leading them back to a point of not being able to afford insurance or a car. This example is obviously not what happened but in built mechanisms can lead to greater wealth inequality over the longer term.

This is an undergraduate course. See ocw.mit.edu/14-01F18 for more info and materials. Best wishes on your studies!

While price goes for Marginal revenue then there comes the law of diminishing returns in the case with Marginal cost equating price as well.

I feel like people shouldn't think of it as an entitlement but that their friends and neighbors that pay taxes want to help them, but want some say on how that money is spent. Also, wouldn't person y still be better off because it frees up $300 for more shelter. They're not $500 better, but they're not worse off.

AI push will eventually lead to a more universal income approach due to job losses but if you create a linear equation they haven't quite perfected the income but it's around $1250 a month. You would most likely need a a wide adoption of the digital dollar to track spending on illicit things

Derivative

The derivative of a function (ax)^n is a*n*(ax)^(n-1) where a is a constant. The square root of PC is equivalent to saying (PC)^(1/2) or (PC)^0.5, so if you're deriving with respect to P, P is your x, C is a, and 0.5 is n, so the derivative would be C*0.5*(PC)^(0.5-1) or 0.5*C*(PC)^(-0.5). x^-n is equivalent to 1/(x^n), a negative power just means you move it to the denominator, so you get 0.5*C/(PC)^0.5, and again, x^0.5 is the same as square root of x, so finally you're left with 0.5*C/squareroot(PC). If you do it with respect to C, C is your x instead, you get 0.5*P/squareroot(PC). dU/dP means derivative of U w/ respect to P, dU/dC means derivative of U w/ respect to C.

marginal utility of one unit of product A divided by that of product B. this indicating the marginal substitution between these two products to remain the same level of utility.

Can y'all tell me why that cash given to Africans boosted their income in short run and the effect got nullified in long run?

He definitely makes the subject of microeconomics interesting.

why would it not be? hes talking about per slice

@@Learn2SingInEnglish right you are

That's some premium pizza

lol

Not way better but both r comparable nd good for students like us(budget constraints)

Are bhai chup chap pdh le na , dono ache hai