You're single handedly carrying me through Ph.D Microecon, and I will be forever grateful for this. I really wish all instructors could explain this like you do
I didn't understand when you mutiplied the derivation of Hicks demand by utility (fixed). There is a mathematical property that explains it? Whether there is, could you please tell me a reference where I could study? Thanks
Hi Economics in many lesson. I appreciate your effort on this particular video. But please, I would really appreciate if i can get explanation on how you got the partial derivative of the compensated demand function. I hope to hear from you soon, best regards.
I will rewrite the compensated demand as X = Py^(1/2)Px^(-1/2)U. I moved the price of good X into the numerator to make it easier. The partial derivative is -(1/2)Py^(1/2)Px^(-1/2 - 1)U. The exponent on the price of Good X is brought down in front and then I subtracted 1 from the exponent on the price of good X. Simplifying to get -(1/2)Py^(1/2)Px^(-1.5)U, which equals -Py^(1/2)U/2Px^(1.5). I moved the price of good X back into the denominator.
Sir, if i want to do a numerical calculation, what price should I substitute? Is it the price change(delta P)? But the result is different from the manual calculation (finding x1 first then x2) 😭😭 did i make a mistake? I'm so overwhelmed😭😭
Substitution effect has no change for Normal or Inferior but the Income effect will have some changes when good is normal IE will be negative and when goods are inferior IE will be positive.
This video is very detailed and well-delivered! May I ask, what is the purpose of the equation? and why would it *need* to be equal in the end? Are there any theories that could help interpret the equation and its scope? Thank you! ^_^
