04:38 Variable & Fixed Inputs 05:37 Long Run vs Short Run 08:09 Short Run 09:35 - - > Marginal Product Utility 12:16 Long Run 13:31 - - > Isoquants 16:16 - - > Leontieff Graph 17:44 - - > Marginal Rate of Technical Substitution 24:40 Returns to scale 29:03 - - > Examples 31:45 Productivity 30:30 - - > Total Factor Productivity 43:58 Three Questions: 44:03 - - > IT Revolution & (lack of) Productivity Gains 45:09 - - > More Work or More Leisure? 46:21 - - > Top 1% vs Bottom 99% - Who gains?
I have never understand this course before until now. This lectures from MIT are of great help to us studying economics. We are not in the class but we do understand the lectures as equal as the class. Professor Gruber is a genius. I am an M.sc Student from Nigerian Defense Academy (NDA), Kaduna, Nigeria. Am looking forward to seeing you, Prof.
Instructors with an empirical background have a wonderful way of distilling a subject. This is awesome stuff. Forever grateful for the introductory content.
00:00 Introduction to producer theory and maximizing profits through minimizing costs. 06:21 Short run production function: labor is variable, capital is fixed. 11:35 Understanding diminishing marginal product of labor and long run production 17:13 Understanding the Marginal Rate of Technical Substitution 22:51 Returns to scale in production 27:50 Returns to scale must decrease eventually 32:23 Productivity and innovation drive economic growth 37:30 Productivity innovation is key to determining a country's standard of living. 42:41 Productivity growth has slowed down since 1973, raising questions about its measurement, utilization, and distribution. 47:07 Productivity gains have only benefited the top 20% of income distribution.
Production Theory test for my Public Policy Grad Micro class on Monday. THANK YOU MIT for your help!!!!!!!!! Been using your lectures all semester to supplement my learning.
On 44:15 "We don't really know [why productivity growth slowed past 2005]": - By December 2005, Facebook had 6 million users. - Twitter created in early 2006 - TH-cam founded in February 2005 Th internet has not been the same ever since.
thank you for allowing all to watch these lectures which are really really helpful and the lecturers are also very good even after paying thousands of pounds to university I have not learnt about these
Thank you so much professor. I have clearly understood the topic of production theory. Hope to pass my MA exam with flying colours at the University of Nairobi, Kenya.
@@someonethirsty1957 Thank you so much for your follow-up question 🙏. I passed with flying colours and graduated yesterday, December 15, 2023, with Master of Economics at the University of Nairobi. Thank you so much once again 💓.
I propose a thesis that return of scale can be strictly increasing in areas of production that does not produce a physical product but a service that is not limited to physical resources or even manual labour.
32:50 Land can be variable actually. Artificial Islands have already been created for many years. China for instance, has developed over 3200 acres of artificial land.
When speaking about the second extreme case, i.e. non substitutable inputs, prof. Gruber states real examples are those where you need both products of a pair, such as, he says is the typical example, shoes...but to me those look like more as outputs, not inputs, i.e shoes are products...instead I found more convincing the example by the girl who says computer and programmer...has anyone an idea on that?
Yea . You are right . The example of right shoe and left shoe is generally taken in case of non substitutable indifference curves and not in case of isoquants. The example given by the girl is apt
So the professor said that the people are not getting richer, only the top 1%. So the productivity in the US doesn't match the earnings of the 'normal' guys. This is sad to hear...I would like to learn more about that, actually.
Food consumption has risen sure, but I’m willing to bet the nutritional consumption is way down. Cost of food, mineral drainage from soil and increase demand for fast and empty calories.
Please help me calculate this problem Suppose the production is given as Q= F(56L^1/2 -12L+K^2+400)where the value of K=5unit then calculate elasticity of input at total output maximizing level of input
Europe... is not more rundown then america?? Also many precursors to the assembly line dating back to the venetian armory (galileo worked there for a short period!) but these are tangential nitpicks. The lectures are amazing.
From the syllabus, "There is no formal textbook for the course. If students are interested in further reading, they can look at the following book: Perloff, Jeffrey M. Microeconomics, 7th Edition. Addison-Wesley, 2012. ISBN: 9780133456912." For more info and materials visit MIT OpenCourseWare at: ocw.mit.edu/14-01F18 Best wishes on your studies!
"The moment that [National Socialist] Germany revolted against the conception that production should be restricted in the interests of a few High Financiers, she created in the minds of all well-informed democrats the fear that Central Europe would break away together from the system of international finance." - William Joyce, "Twilight Over England", 1940
It's probably to adhere to the law of diminishing marginal product of labor, If It were labor*Capital then the derivative of the quantity produced with respect to the labor would Just be the Capital, meaning that a given an increase of 1 in the labor provided the quantity of things produced increases by k regardless of how much labor Is already put in. On the other hand you can check for yourself that if the function Is F(L,K) = √(L*K) then the marginal product of labor Is √K/(2*√L) so as the labor increases so does the change in quantity produced when L increases (because of the √L in the denominator)
3:57 " Labour is pretty easy "Typical capitalist mentality shining in a high level institution. 4:09 "Capital is harder" Sure it is harder but guess what, machines are also built by "workers", buildings are also built by "workers" land is also secured by "workers", therefore this contradicts his statement that capital is difficult. I can't believe people aren't commenting on that.
Easy there buddy. He just means in the short run it's easier to hire more workers than acquire capital. It's a technical problem. Not a value judgement. Go easy on the concepts.
![(M6E2) [Microeconomics] Production Functions](http://i.ytimg.com/vi/aJnksa2weCM/mqdefault.jpg)
04:38 Variable & Fixed Inputs
05:37 Long Run vs Short Run
08:09 Short Run
09:35 - - > Marginal Product Utility
12:16 Long Run
13:31 - - > Isoquants
16:16 - - > Leontieff Graph
17:44 - - > Marginal Rate of Technical Substitution
24:40 Returns to scale
29:03 - - > Examples
31:45 Productivity
30:30 - - > Total Factor Productivity
43:58 Three Questions:
44:03 - - > IT Revolution & (lack of) Productivity Gains
45:09 - - > More Work or More Leisure?
46:21 - - > Top 1% vs Bottom 99% - Who gains?
Thank you so much for this!
?
Thanks for the table of context with the timestamp links
Merci beaucoup
I have never understand this course before until now. This lectures from MIT are of great help to us studying economics. We are not in the class but we do understand the lectures as equal as the class. Professor Gruber is a genius. I am an M.sc Student from Nigerian Defense Academy (NDA), Kaduna, Nigeria.
Am looking forward to seeing you, Prof.
Instructors with an empirical background have a wonderful way of distilling a subject. This is awesome stuff. Forever grateful for the introductory content.
00:00 Introduction to producer theory and maximizing profits through minimizing costs.
06:21 Short run production function: labor is variable, capital is fixed.
11:35 Understanding diminishing marginal product of labor and long run production
17:13 Understanding the Marginal Rate of Technical Substitution
22:51 Returns to scale in production
27:50 Returns to scale must decrease eventually
32:23 Productivity and innovation drive economic growth
37:30 Productivity innovation is key to determining a country's standard of living.
42:41 Productivity growth has slowed down since 1973, raising questions about its measurement, utilization, and distribution.
47:07 Productivity gains have only benefited the top 20% of income distribution.
Thank MIT for providing this kind of lecture and free-for-all community. This is a real democratization for everyone.
Production Theory test for my Public Policy Grad Micro class on Monday. THANK YOU MIT for your help!!!!!!!!! Been using your lectures all semester to supplement my learning.
On 44:15 "We don't really know [why productivity growth slowed past 2005]":
- By December 2005, Facebook had 6 million users.
- Twitter created in early 2006
- TH-cam founded in February 2005
Th internet has not been the same ever since.
thank you for allowing all to watch these lectures which are really really helpful and the lecturers are also very good even after paying thousands of pounds to university I have not learnt about these
Thank you so much professor. I have clearly understood the topic of production theory.
Hope to pass my MA exam with flying colours at the University of Nairobi, Kenya.
Did you pass with flying colors?
@@someonethirsty1957
Thank you so much for your follow-up question 🙏. I passed with flying colours and graduated yesterday, December 15, 2023, with Master of Economics at the University of Nairobi.
Thank you so much once again 💓.
@@akolonomics
You must be very proud. This new accomplishment sounds like the next big step for you!
This course in now getting interesting. I must complete it.
It was interesting since day 1. Clearly you weren't paying attention.
@@vaibhavkeshari9620 Seems like you were the one not paying attention. You must have missed out on the concept of ordinal utility.
I propose a thesis that return of scale can be strictly increasing in areas of production that does not produce a physical product but a service that is not limited to physical resources or even manual labour.
Goal of producer to maximise profit , make production effectiently as possible Profit = Revenue-Cost
These lectures are priceless. God bless MIT.
Did he just say "how much shit we have" at around the 40 min mark? Gotta be the coolest Prof I've ever seen.
He did indeed, that and the porn part made me chuckle.
@@Alemiha i can't seem to spot the porn part
@@winstonacousticstudio445 44:25
I am from Pakistan
And your teaching ability is just marvelous 👌🏼🤗...Thanks for being helping me to understand microeconomics 🙌🏼
i love Prof. Gruber's teachings, so concise and informative
He is such a wise man.
Master OOgway
R.I.P for the chalks from his classes...8:19
Super helpful and complete class. Grateful for the content. Keep improving!
“Let’s think of two perfectly substitutable inputs. A Harvard graduate and a beanie baby.”
the class audio was muted @chaitanyasharma3921
What does beanie baby mean I didn't get the joke can anyone explain 😭
@@redrubydasleeze17
Google was invented in 1998
People in 1997:
@chaitanyasharma3921 if i went to MIT I would not ever even think about joking or losing my focus laughing at jokes either.
This Professor is incredible!!Loving getting taught by him!!
The hero I needed, Godspeed sir.
I love you sir u are a perfect professor , i even not a student of economics understand clearly
I was studying economy but here in English version..nice post..
46:00 we can also say that we spend alot of our productivity on wars...which is why our infrastructure is degrading.
Or better, in bellic study and production
8:19 I have indestructible chalks but they also don't write.
Very precise and informative thanks sir BTW watching this from Zimbabwe
long run production and returns to scale, see the bookmarks very very important
32:50 Land can be variable actually. Artificial Islands have already been created for many years. China for instance, has developed over 3200 acres of artificial land.
Land would be more of a long run variable than short run
Isn't that land defined as 'natural resources' used in production? From this logic, artificial island which is man-made is not land.
This recording really helpful...watching from Solomon Islands in the Pacific
Bro is saving my semester let him cook 🙏🙏♨️♨️♨️♨️ give this man a raise
44:18 ai is taking over now... crazy how far things changed since 2018
The force is with you .
Krugman said: productivity isn't not everything, but in the long run it is.
Locus of all combinations of L n K which give you the same level of output is an isoquant!
Would you prescribe a Microeconomics book which will be relevant with this excellent lecture?
You just know he makes that harvard joke every year
Production principles are ever in close cooperation with demand principles. The producer to produce have to follow carefully market demand.
everytime he says OK..... have a deep breath
If the chalks were indestructible, will they be able to write?
수요는 넘 어려웠는데 그걸 하고나니 공급은 좀 더 수월하니 재밌다.. 아직까지는 ...
Let's assume a hypothetical condition where we can change capital, but we cannot change labor, so capital is variable and labor is fixed ?
When speaking about the second extreme case, i.e. non substitutable inputs, prof. Gruber states real examples are those where you need both products of a pair, such as, he says is the typical example, shoes...but to me those look like more as outputs, not inputs, i.e shoes are products...instead I found more convincing the example by the girl who says computer and programmer...has anyone an idea on that?
Yea . You are right . The example of right shoe and left shoe is generally taken in case of non substitutable indifference curves and not in case of isoquants. The example given by the girl is apt
He won't be able to write if he used indestructible chalks
Probably a marker and whiteboard would be a good substitute
So the professor said that the people are not getting richer, only the top 1%. So the productivity in the US doesn't match the earnings of the 'normal' guys. This is sad to hear...I would like to learn more about that, actually.
Additional production is only none returm with wage capital, not salary capital.
That's nice presentation however I need the presentation on long run and short run production ie economies of scale,deeconomies of scale
Not every one fully utilize features built in windows. It led to productivity remained. Cause behavior and skill not changed much
such a good explanation, thank you so much. this is very helpful
A great lecture delivered, thanks sir.
This is amazing holy crap
Thank you for uploading this for free.
Am I the only one who found out he said internet only helped us improve productivity at 44:28?
I can't believe I'm attending an MIT Economics class from Africa😅😅!!
Thankyou prof,it was very helpful clear and understandable
Food consumption has risen sure, but I’m willing to bet the nutritional consumption is way down. Cost of food, mineral drainage from soil and increase demand for fast and empty calories.
thank you instructor!
Thanks instructor and MIT
I love these courses I learn so much! Even more fascinating is the fact that he did not yet seem to be canceled by being fat phobic lol.
Paid money to local university and here we take lectures to understand economy 😂😂
at 47:00 thats easy. Inflation destroyed the wealth.
at 44:00 we know why. Regulation.
Thanks for the lecture it has been so Good...
Please help me calculate this problem
Suppose the production is given as
Q= F(56L^1/2 -12L+K^2+400)where the value of K=5unit then calculate elasticity of input at total output maximizing level of input
Love this professor, super energetic : )
That was excellent thank you so much
Europe... is not more rundown then america?? Also many precursors to the assembly line dating back to the venetian armory (galileo worked there for a short period!) but these are tangential nitpicks. The lectures are amazing.
Watching from Bangladesh.
Very impressed your lecture sir...
interesting; related to reality (not just theory)
Why is f(2L, 2K) = 2f(l, K) and not 4f(l, K)?
I'm guessing due to the distributive property of mathematics! My question was: Is AI kapital or labor?
Amazing lecture bro
This guy sounds like a.communist.describing capital.theory. and i love it
well no it is all just technicalities
Could someone please dwell more into “firm and market concept” in reference to this lecture
Guys which book are they using please ?????
From the syllabus, "There is no formal textbook for the course. If students are interested in further reading, they can look at the following book:
Perloff, Jeffrey M. Microeconomics, 7th Edition. Addison-Wesley, 2012. ISBN: 9780133456912."
For more info and materials visit MIT OpenCourseWare at: ocw.mit.edu/14-01F18
Best wishes on your studies!
thank you so much!!!!
Is this that Japanese chalk ?
"The moment that [National Socialist] Germany revolted against the conception that production should be restricted in the interests of a few High Financiers, she created in the minds of all well-informed democrats the fear that Central Europe would break away together from the system of international finance." - William Joyce, "Twilight Over England", 1940
Does anyone know where the square root is derived from in all the production functions e.g. why is is sqrt of p x s not just p x s?
It's probably to adhere to the law of diminishing marginal product of labor, If It were labor*Capital then the derivative of the quantity produced with respect to the labor would Just be the Capital, meaning that a given an increase of 1 in the labor provided the quantity of things produced increases by k regardless of how much labor Is already put in.
On the other hand you can check for yourself that if the function Is F(L,K) = √(L*K) then the marginal product of labor Is √K/(2*√L) so as the labor increases so does the change in quantity produced when L increases (because of the √L in the denominator)
what is the secret behind understanding and passing microeconomics ?
Studying. I'm in the same boat man, really studying by immersing myself in econs.
this and khan academy
Someone needs to invent me some more indestructible chalk 8:18
Stupid
39:50 you're welcome
"There's never been a famine in a democracy."
He knows how to teach :)
Super great video
I guess that economics should be among the easiest courses at MIT...
Anything is easy if you have a background in engineering.
@@HarukiYamamoto why
thank you very muchhh huhuhu
13:01
Cant believe a pro cant tell big Q from little q
2:50
Prof: We will try to keep it straight.
LGBTQ+ Community: Let's protest.......
Very thorough prof
39:00
my teacher could never
39:51 how much….SHIT???? What the…..?!
lol what is your problem
Philippines here 😅
I'm confused though. Why is this guy still using chalk and a chalkboard? This is MIT, right?
So biggest so smaller.
Science vs philosophy.
Europe is more run down?? 😂
15:35
15:12
,
:)
3:57 " Labour is pretty easy "Typical capitalist mentality shining in a high level institution.
4:09 "Capital is harder"
Sure it is harder but guess what, machines are also built by "workers", buildings are also built by "workers" land is also secured by "workers", therefore this contradicts his statement that capital is difficult. I can't believe people aren't commenting on that.
Easy there buddy. He just means in the short run it's easier to hire more workers than acquire capital. It's a technical problem. Not a value judgement. Go easy on the concepts.
calm down my gen Z friend
The presentation is too abstract, and in reality needs specific examples, production is hard thing , cannot be presented in very simple way
well that is the laziest 2 I have ever seen.