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
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!
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,
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.
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.
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
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???
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'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.
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!!!
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).
