are the demand functions mentioned at the beginning of the video specifically for George? I was confused when she said 'as we know from other videos' - is this some rule for demand functions that I am not aware of?
George - for the utility function given for George at around 0:40, which is a Cobb-Douglas utility function, these are the demand functions. These are derived by solving George's utility maximization problem. You can review the solution to that problem that results in these demand functions on the Utility Maximization video also on this channel. Hope this helps! Thank you for watching!
Sorry George - the video you want to look at to see how to solve for the demand functions is called "Choice" - the solution is about 8 minutes in. Hope this helps!
si, pero no se corre a la izquierda, pivota sobre el "óptimo de esquina". Probablemente ya te habrás dado cuenta de esto solo tras el paso de 4 años. Saludos, amigo!
@@KatherineSilzCarson that means this equation is only useful for calculating demand for only one good because if you take good X into consideration than it won't tally
Two things to remember: (1) The sign of the substitution effect is ALWAYS negative. So, if the price rises, quantity demanded falls. If the price falls, quantity demanded rises. (2) Giffen goods are inferior goods. This means that if income goes up, the amount the consumer buys falls. So, let's put these together and see what we get for a Giffen good. A Giffen good is defined as a good with an upward-sloping demand curve, meaning that consumers buy more as the price rises. Let's take the case of a price increase. If the price rises, the substitution effect results in the consumer buying LESS. Because the price rises, the consumer's buying power falls. Since the good is an inferior good, lower buying power means the consumer will buy MORE. In order for the overall effect from the price increase to be positive, the income effect has to be bigger than the substitution effect. That's what makes a good a Giffen good - it's an inferior good for which the income effect is greater than the substitution effect - resulting in an upward sloping demand curve. Hope this helps. Sorry for the delay in replying.
THANK YOU SIR FOR REPLY . SIR I HAVE SOME MORE QUESTION PLZ CONTACT ME ON MY MAIL hali58163@gmail.com QUESTION ; DISTINGUISH BETWEEN KEYNES'S CONSUMPTION AND KUZNET'S CONSUMPTION .FUNCTION.HOW HAVE THESE TWO FUNCTIONS BEEN RECONCILES?
