good day, I am always finding difficulty knowing where to place the optimal bundle (point B). For example, why would point B not be slightly higher or slightly lower on IC1? In my textbook, point B is between points A and C as opposed to being lower than both of them. So my question is how do we know where to plot point B? Any help would be much much appreciated. Thanks for the wonderful video
In order to show that both the income effect and the substitution effect reduce the demand for good X (apples), B will appear between points A and C in most textbooks.
Hi sir, may you please tell me the mpact of an increase in indirect taxation on the quantity demanded of a good depends on whether it is a normal or inferior good
sobia javaid this analysis enables you to identify the point at which utility is maximised from a given income/budget - we are trying to highlight where utility is maximised as opposed to which basket of goods is most affordable.
@@gconomics3766 I found price effect in case of inferior goods on your channel but not in case of giffen goods. If there is any send me one please . I love your explaination and I can't understand in others.
your illustration makes it seem like the income effect outweighs the substitution however in the case of a normal good the sub effect should overpower the negative income effect
Not the case, Both goods are normal, and the income and substitution effects work in the same direction. In other words, when the price of apples increases, both income and substitution effects reduce the consumption of apples.
Parth Khedekar yes, except it pivots rather than shifts because the price of cola hasn’t changed, therefore, the same amount of cola can still be bought.
Sir, you just got me ready for my final next week in a big way on this exact topic. On point at the highest level.
From where can we get this book free online ?
Sir plz made video in case of inferior good when their prices rises
good day, I am always finding difficulty knowing where to place the optimal bundle (point B). For example, why would point B not be slightly higher or slightly lower on IC1? In my textbook, point B is between points A and C as opposed to being lower than both of them. So my question is how do we know where to plot point B? Any help would be much much appreciated. Thanks for the wonderful video
In order to show that both the income effect and the substitution effect reduce the demand for good X (apples), B will appear between points A and C in most textbooks.
@@gconomics3766 thank you
Hi sir, may you please tell me the mpact of an increase in indirect taxation
on the quantity demanded of a good depends on whether it is a normal or inferior good
Hungry for Apples
Sir how do we know that which point is best affordable on a budget line?
sobia javaid this analysis enables you to identify the point at which utility is maximised from a given income/budget - we are trying to highlight where utility is maximised as opposed to which basket of goods is most affordable.
Hi, what if the income decreases as well?
Bro just saved my life
Great explanation sir,
Respect from Nepal
Glad it was useful.
@@gconomics3766 I found price effect in case of inferior goods on your channel but not in case of giffen goods. If there is any send me one please . I love your explaination and I can't understand in others.
@@suggestmeagoodname8778 Thanks. I haven't recorded a video for giffen goods. I'll try to record a new one in the coming weeks.
@@gconomics3766 Ok sir thankyou
your illustration makes it seem like the income effect outweighs the substitution however in the case of a normal good the sub effect should overpower the negative income effect
Not the case, Both goods are normal, and the income and substitution effects work in the same direction. In other words, when the price of apples increases, both income and substitution effects reduce the consumption of apples.
thanks sorry for the delayed response however what is the case for a giffen good
Sir but when the price of the apples rises, why BL2 will be drawn inside of Initial BL1??
Parth Khedekar if the price of apples rises then the maximum number you can afford to buy falls.
Just like in Demand ri8?
Parth Khedekar yes, except it pivots rather than shifts because the price of cola hasn’t changed, therefore, the same amount of cola can still be bought.
Thanks sir🤗
Hi sir, can you upload a video for a price increase for a giffen good?
Sure, once lockdown ends.
Can I please have that book
It's no longer published.
great explanation. thank you!
Good lecturing
Thank you for the lecture
👏👏
that was so helpful but tt sound effect after e video brain washed everything .
Thanks a lot
No worries!
This really helped me, thank you.
Super!
More clear
clearer*
u da best!
Glad you find the videos useful.