This video is awesome but at the beginning explanation, MRS(x,y)=(MU_x)/(MU_y) should be how many unit of good "y" is the agent willing to give up for an extra unit of good "x" instead.
This video explains how to calculate and use the marginal rate of substitution (MRS). We start by learning how to calculate it, then move on to use it in order to properly draw indifference curves and, finally, we analyse the MRS for different kinds of indifference curves. A.3 Marginal rate of substitution | Consumption - Microeconomics Learn, and enjoy!
Because in order to get the MRS you need to calculate the marginal utility (MU), the partial derivative, for x and y. In the first example the utility function is given by y^2+x^2. This results in the following partial derivatives: dU/dy (or y')= 2y^2-1=2y and dU/dx (or x')=2x^2-1 = 2x. In the second example the utility function is given by y * x, resulting in a different differentiation due to the multiplication. The dU/dy (or y')= x * y^1-1 = x and dU/dx ( or x') = x^1-1 * y = y . The difference in the first and second example is mainly caused by the nature of the utility functions. Example one uses y + x and example two uses y*x, this makes a big difference when calculating the partial derivatives.
Good video... 2nd problem: can anyone explain to me why she flipped x and y on the MRS formula, after derivation she got Ux=Y and Uy=x but in the formula she flipped it MRS= Y/X .... please anyone! thanks in advance
Its important for you to explain why math is not math in economics. What i mean is when you take the derivative of X and Y they dont just end up As X and Y as the derivative should be 1 and 1. If iam not mistaken.
Wow , I most admit that you clear some challenges for me here but how can I go about solving problems like this U=√XY to find the marginal rate of substitution
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This video is awesome but at the beginning explanation, MRS(x,y)=(MU_x)/(MU_y) should be how many unit of good "y" is the agent willing to give up for an extra unit of good "x" instead.
This video explains how to calculate and use the marginal rate of substitution (MRS). We start by learning how to calculate it, then move on to use it in order to properly draw indifference curves and, finally, we analyse the MRS for different kinds of indifference curves.
A.3 Marginal rate of substitution | Consumption - Microeconomics
Learn, and enjoy!
Dear Policonomics,
why is the formula for the MRS = 2x/2y (or x/y in the second example)? shouldn't it be the other way around? 2y/2x =(u'(y)/u'(x))?
I'm alswo waiting for an answer on that :)
Because in order to get the MRS you need to calculate the marginal utility (MU), the partial derivative, for x and y. In the first example the utility function is given by y^2+x^2. This results in the following partial derivatives: dU/dy (or y')= 2y^2-1=2y and dU/dx (or x')=2x^2-1 = 2x. In the second example the utility function is given by y * x, resulting in a different differentiation due to the multiplication. The dU/dy (or y')= x * y^1-1 = x and dU/dx ( or x') = x^1-1 * y = y . The difference in the first and second example is mainly caused by the nature of the utility functions. Example one uses y + x and example two uses y*x, this makes a big difference when calculating the partial derivatives.
omg in 5 minutes you explained something my teacher couldn't explain in 3 hours
+
Superfine and clean presentation. I totally Loved it.
Much love from India.. understood
thank you. the video has everything I need to know
I love how precise the interpretation was
Good video... 2nd problem: can anyone explain to me why she flipped x and y on the MRS formula, after derivation she got Ux=Y and Uy=x but in the formula she flipped it MRS= Y/X .... please anyone! thanks in advance
This video was great! Thank you so much that makes so much sense now!
Its important for you to explain why math is not math in economics. What i mean is when you take the derivative of X and Y they dont just end up As X and Y as the derivative should be 1 and 1. If iam not mistaken.
They are doing partial derivative. So when deriving the utility function you make one of the variable a constant.
AMAZING !! THANK YOU SO MUCH !!!!!!!
Hi
Wow , I most admit that you clear some challenges for me here but how can I go about solving problems like this U=√XY to find the marginal rate of substitution
Given utility function u(x1,x2)=max(@x1,Bx2),
find mariginal rate of substitution
Thanks amillion.
Thanks so much
Great vid ba
Your language is very hard ma'am