Glad to hear that! Since you are a TA, if you would like you can email contact@diagknowstics.com and let us know -- we can provide you access with some exclusive other microeconomics content to give your students (all for free :) ).
the shade you threw at the marginal cost curve was funny but also kinda comforting, because I was struggling with it because it didn't make sense to me that producing one more of an item should increase costs beyond the initial production cost, especially when bulk buying resources usually brings production cost down? this video kinda helped to just accept that that's what the model says
Thank you! Yes, exactly. If you're not "confused" by marginal cost when you first read it, you probably didn't understand what it meant (most people think it refers to the "total" cost of more, and assume that's why it goes up). So kudos to you for questioning that at first!
But, marginal cost concept can better be explained using different suppliers; if you’re thinking of the same supplier, you can’t get the real concept of marginal cost
@@Love2us100 technically you can't explain it that way though, because "MC" as a concept is specifically for ONE firm. If you add multiple suppliers to the mix, that is getting at the "horizontal addition" which I think Rohen covered in a previous video that relates to "Market Supply"
This might be a long shot but hoping you can help me understand this problem! I think this has to do with opportunity cost but the question reads: Wilma can prepare 7 meals or wash 21 shirts in a day. Fred can prepare 5 meals or wash 10 shirts in a day. ______ should specialize in preparing meals and _______ should specialize in washing shirts. The answer is Fred; wilma but I'm not understanding how they got that answer.
Great question! This has to do with absolute and comparative advantage. Essentially you have to find the "opportunity cost" for each person for each good, and whoever has the lower opportunity cost for that good has the comparative advantage and should produce it. Here's a video of how to calculate that: th-cam.com/video/C3KXeb5UmNs/w-d-xo.html ^ You should find that Wilma's Opp. Cost of a meal is "3" and Fred's is "2", and since Fred has the lower cost they should produce meals. Similarly for shirts, Wilma's cost is 1/3 and Fred's is 1/2, since 1/3 is lower Wilma should produce shirts
I was teached that if the Total Cost is given by for example f(x)=1000+2x+x^2 then the MC would be f'(x) 2+2x This works when x is 2, but not when x is 1. Why? The change in cost from f(1) to f(2) divided by the change in quantity from f(1) to f(2) is is not the same as f'(2) But the change in cost from f(1) to f(2) + the change from f(2) to f(3) divided by 2 is the same as f'(2)
Great question! The derivative is the exact marginal cost if we assume quantity is continuous; the formula here about the change in cost over change in quantity is useful when you don’t have the precise formula, and all you have is a table with values at whole number quantities
If the equilibrium is in (5,5), does that mean the supplier gains 0 profit, since the cost=price? If so, can you not gain profit in perfect competition?
Great question. It’s true that in the “long run” you can’t gain any profit in perfect competition because others will enter and drive down the price. But in the short run it is possible to make a profit - what you are referring to with 5,5 says that they don’t make a profit “on the last unit” (marginal) since the 5th unit cost $5 to produce and they sold for $5. But the 4th unit, which also “sells” for $5, cost them less, so they make a profit on the first 4 units but not the very last one
Short answer is "yes", but if we are being very technical, the answer is "the supply curve is the portion of the MC curve above the shut down price" In other words, above the min AVC price, "MC" and "Supply" are synonymous. For prices below that, Supply = 0 because the firm won't produce (but the MC might have some small value).
Great question! It's subjective person to person, but essentially you would reason as "how much would my test score go up if i study one more hour?" If studying 1 more hour makes your test score/class grade go up by 6%, then you would ask yourself how much would you be "willing to pay" to have that 6% score boost (this will vary person to person) -- and if you're willing to pay $20 for that, for example -- then that's the marginal benefit of studying 1 extra hour.
Hello sir im from Bangladesh...do you have more videos about micro economics and macro economics ... I would be so much grateful ....i really dont understand the economic part .. plz help me 🙂🥲
Hey! Yes we have an adaptive learning platform, and also a playlist for microeconomics topics. You can view the playlist from this youtube channel, and for access to the platform, please email contact@diagknowstics.com
Hey! In all of economics, there are two layers at which we can think about concepts: Non-Calculus version, and Calculus version. This video is the first layer of understanding (non-calculus). However, even with the calculus version, Marginal Benefit is NOT the derivative of demand; it IS the demand. Marginal Benefit (aka Demand) is the derivative of the "Total Benefit" curve -- I think that's what you might have been thinking. Similarly, Marginal Cost (aka Supply) is the derivative of the Total Cost curve.
Cool. So to check my understanding, demand is the set of all points where marginal benefit equals ZERO (with 0 meant to be in italics, but I can't do that on a phone :) )? I'm imagining a 3D graph with benefit for the consumer as a function of price and quantity, b(q,p), with db/dq=0 defining a curve q(p). Is that more complete? Thanks!
hey u say that the slice of pizza is determined by the shop but how then u can value it down as u wish ? mainly how could it reduce to 9-7-5 it so on. even so it can be law of diminishing marginal utility how does the value change..?
Good question! The distinction here is price versus value. The PRICE (what you physically would have to pay) is set by the shop and is always constant. But independent of the price, the value is what YOU are WILLING to pay (and this varies person to person, unlike the price which is fixed for all). And this is based on how much you like pizza, etc. -- and this typically decreases the more pizza you consume because of diminishing marginal utility. So you are WILLING to pay less for the 3rd slice than you were for the first slice (even though you have to pay the same price in the real world to the store owner)
Thanks man I'm watching this the night before my mid term wish me luck
Thank you - and good luck! You've got this! :)
hahahahaha !!Tomorrow is also my midterm wish u best of luck
Same hahhha
Same!!!
I have freakin 3 mid term exam on same day because of Corona Virus
Same😁
I'm a TA for Micro Economics and was looking for videos to send to my students and this is fantastic! Well explained.
Glad to hear that! Since you are a TA, if you would like you can email contact@diagknowstics.com and let us know -- we can provide you access with some exclusive other microeconomics content to give your students (all for free :) ).
This is awesome dude! You really explained the CONCEPT behind the terms which I've been struggling with! Stay blessed!
Thank you so much!! :)
Thanks man this helps a lot with learning about positive and negative externality graphs C:
Very informational. Thanks.
Yes this is a great video.
watching this before midterm.... thank you this is very helpful too. I think I will A+ my exam! (HOPEFULLY)
Yay! Good luck!! :)
Great work! Helped me understand these two terms better!
Thanks for the kind words! :)
the shade you threw at the marginal cost curve was funny but also kinda comforting, because I was struggling with it because it didn't make sense to me that producing one more of an item should increase costs beyond the initial production cost, especially when bulk buying resources usually brings production cost down? this video kinda helped to just accept that that's what the model says
Thank you! Yes, exactly. If you're not "confused" by marginal cost when you first read it, you probably didn't understand what it meant (most people think it refers to the "total" cost of more, and assume that's why it goes up). So kudos to you for questioning that at first!
thank you that was very helpful
This is an amazing story
Such a good explanation ! Thank you!
Thanks for the kind words! :)
Amazing explanations, thanks man keep it up!
Thank you for the kind words! :)
thanks for his ,perfectly eplained .Love from south africa
Thank you for the kind words! :)
This video was perfect - thank you!
You’re very welcome! :)
thanks so much! u deserve a sub
You teaching so nice.... Respect
I really like your videos because of your real life examples which is easy to understand ❤ thanks
Thank you for the kind words! :)
You are amazing please make more videos! We appreciate it thank you!
Thank you for the kind words!!
Amazing vid! Thank you!
Thanks for your comment!
great explanation!!!
Thank you! :)
you make the terms easier to understand. great examples like pizza slices. lol
Thank you!! :)
Great video...now I'm hungry haha
Thanks I needed to know the marginal benifit. You made me understand that quite well
Glad to hear that! :)
What you understand? Can you explain?
This one is the one of the best and simple explanations that I found.
Thank you for the kind words!
This video is amazing
Thank you!
Thank you so much
You’re welcome! :)
Nice
hero
Thanks for the kind words! :)
Very helpful
Thank you!
Very helpful💯
Glad you found it helpful!
Well said! Thank you
thank you for watching :)
But, marginal cost concept can better be explained using different suppliers; if you’re thinking of the same supplier, you can’t get the real concept of marginal cost
@@Love2us100 technically you can't explain it that way though, because "MC" as a concept is specifically for ONE firm. If you add multiple suppliers to the mix, that is getting at the "horizontal addition" which I think Rohen covered in a previous video that relates to "Market Supply"
Thank you
Anytime! :)
Watch this video at 1.5 speed and he sounds like Ben Shapiro.
Great video my guy, thanks for the helpful information!
Thank you! :)
You’re the best
Thank you! :)
ur a blessing
Thank you! :)
This might be a long shot but hoping you can help me understand this problem! I think this has to do with opportunity cost but the question reads: Wilma can prepare 7 meals or wash 21 shirts in a day. Fred can prepare 5 meals or wash 10 shirts in a day. ______ should specialize in preparing meals and _______ should specialize in washing shirts. The answer is Fred; wilma but I'm not understanding how they got that answer.
Great question! This has to do with absolute and comparative advantage. Essentially you have to find the "opportunity cost" for each person for each good, and whoever has the lower opportunity cost for that good has the comparative advantage and should produce it. Here's a video of how to calculate that: th-cam.com/video/C3KXeb5UmNs/w-d-xo.html
^
You should find that Wilma's Opp. Cost of a meal is "3" and Fred's is "2", and since Fred has the lower cost they should produce meals. Similarly for shirts, Wilma's cost is 1/3 and Fred's is 1/2, since 1/3 is lower Wilma should produce shirts
Chefs kiss :*
I was teached that if the Total Cost is given by for example f(x)=1000+2x+x^2 then the MC would be f'(x) 2+2x
This works when x is 2, but not when x is 1. Why?
The change in cost from f(1) to f(2) divided by the change in quantity from f(1) to f(2) is is not the same as f'(2)
But the change in cost from f(1) to f(2) + the change from f(2) to f(3) divided by 2 is the same as f'(2)
Great question! The derivative is the exact marginal cost if we assume quantity is continuous; the formula here about the change in cost over change in quantity is useful when you don’t have the precise formula, and all you have is a table with values at whole number quantities
If the equilibrium is in (5,5), does that mean the supplier gains 0 profit, since the cost=price? If so, can you not gain profit in perfect competition?
Great question. It’s true that in the “long run” you can’t gain any profit in perfect competition because others will enter and drive down the price. But in the short run it is possible to make a profit - what you are referring to with 5,5 says that they don’t make a profit “on the last unit” (marginal) since the 5th unit cost $5 to produce and they sold for $5. But the 4th unit, which also “sells” for $5, cost them less, so they make a profit on the first 4 units but not the very last one
So Marginal Cost is the same as supply curve?
Short answer is "yes", but if we are being very technical, the answer is "the supply curve is the portion of the MC curve above the shut down price"
In other words, above the min AVC price, "MC" and "Supply" are synonymous. For prices below that, Supply = 0 because the firm won't produce (but the MC might have some small value).
What would be the marginal benefit for studying each hour ?
Great question! It's subjective person to person, but essentially you would reason as "how much would my test score go up if i study one more hour?" If studying 1 more hour makes your test score/class grade go up by 6%, then you would ask yourself how much would you be "willing to pay" to have that 6% score boost (this will vary person to person) -- and if you're willing to pay $20 for that, for example -- then that's the marginal benefit of studying 1 extra hour.
KING
Thanks for the kind words!
brooooo I’m a year late but i aced a pop quiz
Yay! Glad to hear that!
Tomorrow is my mid
Hello sir im from Bangladesh...do you have more videos about micro economics and macro economics ... I would be so much grateful ....i really dont understand the economic part .. plz help me 🙂🥲
Hey! Yes we have an adaptive learning platform, and also a playlist for microeconomics topics. You can view the playlist from this youtube channel, and for access to the platform, please email contact@diagknowstics.com
Hmmm... what? Marginal benefit seems like the derivative of demand with respect to quantity (Calculus).
Hey! In all of economics, there are two layers at which we can think about concepts: Non-Calculus version, and Calculus version. This video is the first layer of understanding (non-calculus). However, even with the calculus version, Marginal Benefit is NOT the derivative of demand; it IS the demand. Marginal Benefit (aka Demand) is the derivative of the "Total Benefit" curve -- I think that's what you might have been thinking. Similarly, Marginal Cost (aka Supply) is the derivative of the Total Cost curve.
Cool. So to check my understanding, demand is the set of all points where marginal benefit equals ZERO (with 0 meant to be in italics, but I can't do that on a phone :) )? I'm imagining a 3D graph with benefit for the consumer as a function of price and quantity, b(q,p), with db/dq=0 defining a curve q(p). Is that more complete?
Thanks!
How you manage to write backwards !??
We horizontally flipped the video during editing :)
DiagKNOWstics Learning 🤪🤪
Sir your lecture is so good but your expression remind me Mr.Bean
I feel dumb
nigga spent 21$ for three slices of pizza. smh
hey u say that the slice of pizza is determined by the shop but how then u can value it down as u wish ? mainly how could it reduce to 9-7-5 it so on. even so it can be law of diminishing marginal utility how does the value change..?
Good question! The distinction here is price versus value. The PRICE (what you physically would have to pay) is set by the shop and is always constant. But independent of the price, the value is what YOU are WILLING to pay (and this varies person to person, unlike the price which is fixed for all). And this is based on how much you like pizza, etc. -- and this typically decreases the more pizza you consume because of diminishing marginal utility. So you are WILLING to pay less for the 3rd slice than you were for the first slice (even though you have to pay the same price in the real world to the store owner)
midterm in 45 mins
god
This guy reminds me of Ben Shapiro.
Thank you
Glad you found it helpful!