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Videos uploaded by user “Free Econ Help”
Binding and Non-binding Price Ceilings
 
02:16
This video introduces the concept of a price ceiling and shows the three different possible locations of a price ceiling: under the market equilibrium price, at the market equilibrium price, and over the market equilibrium price. The video then discusses whether or not the price ceiling is binding at these different locations. We care about binding price ceilings because they introduce a shortage to the economy which results in a deadweight loss. If our goal is to have an efficient economic system then we would try to not introduce price ceilings but find another way to get resources to individuals at lower prices. More information on this topic can be found at http://www.freeeconhelp.com/2012/03/what-is-price-ceiling-examples-of.html
Views: 65674 Free Econ Help
Long run average total cost curve relating to economies and diseconomies of scale
 
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This video goes over the construction of the long run average total cost curve by showing how it relates to the many possible short run average total cost curves. It then discusses how economies of scale, constant returns to scale, and diseconomies of scale can be seen on the long run average cost curve. Essentially we are taking multiple short run average total cost curves with varying levels of capital and figuring out why they have a U shape in the long run. This is also explored by discussing what returns we get from "doubling" the inputs. If it is less than double then we are experiencing diseconomies of scale and if it more than doubles than we are experiencing economies of scale. Finally, if it exactly doubles then we are experiencing constant returns to scale. More information on this topic can be found at http://www.freeeconhelp.com/2012/03/long-run-average-total-cost-curve-with.html
Views: 169921 Free Econ Help
What shifts the IS or LM curves
 
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This video goes over the causes, intuition, and equations behind the possible causes of shifts for the IS and LM curves in the IS/LM model. Each shift of the IS curve is explained and explored in detail. We also go over the impacts on the graph and the intuition behind it. The possible shifts for the LM curve are also explored and discussed in detail. Each resulting equilibrium is found and discussed to make sure understanding is clear. More information about this topic can be found at http://www.freeeconhelp.com/2012/04/what-causes-shifts-in-is-or-lm-curves.html
Views: 156534 Free Econ Help
Aggregate Expenditure and the 45 degree line
 
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This movie goes over aggregate expenditure and its relationship with real GDP and the 45 degree line graph. It is important to understand the differences that occur with aggregate expenditure especially when the outcomes are different than what one would expect them to be. That's why we explore aggregate expenditure's relationship to the 45 degree line and talk about the intuitive implications of this relationship. More information about this topic can be found at http://www.freeeconhelp.com/2011/10/aggregate-expenditure-and-45-degree.html
Views: 104116 Free Econ Help
How to calculate opportunity costs
 
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This video goes over the process of calculating opportunity costs. Generally, opportunity costs involve tradeoffs associated with economic choices. Specifically the opportunity cost is the value of the best available alternative (that you have given up). This video goes over my personal method to make sure the opportunity costs are calculated correctly. More information about this is available at: http://www.freeeconhelp.com/2011/09/calculating-marginal-and-total.html
Views: 496004 Free Econ Help
Perfect Competition and Profit Maximization
 
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This video goes over the basics of profit maximization for a perfectly competitive firm. We explore the profit maximizing point graphically by comparing marginal cost with marginal revenue. The perfectly competitive market structure is interesting because it has a constant price and average price because it is a price taker. More information is available at http://www.freeeconhelp.com/2012/01/perfect-competition-and-profit.html
Views: 149016 Free Econ Help
What happens to equilibrium price if both supply and demand increase
 
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This video shows the potential outcomes for equilibrium price, if both the supply and demand curves shift right. The answer is unknown without knowing the magnitudes of the shifts, and this is explained. We explain what happens to cause the changes in both supply and demand and then demonstrate the resulting effect that these changes have on the price. We can see from the video that there is definite direction that price must move but that is not the end of the story. We also have to take into account the magnitude of the changes to both supply and demand. Once we know the magnitude of the changes we can figure out the new equilibrium price and whether this equilibrium price will be higher or lower than the original market price. We can also then explore the equilibrium quantity to see how it compares to the original market quantity found in the beginning of the problem. More info is available at http://www.freeeconhelp.com/2011/08/what-happens-to-price-if-both-demand.html
Views: 39369 Free Econ Help
Change in demand vs. change in quantity demanded
 
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This movie explains the difference between a change in demand and a change in quantity demanded. The trick here is to remember that demand represents the relationship between price and quantity while quantity demanded is a single number that the consumers wish to purchase. Sometimes a question will ask what the change in quantity demanded is (which is a number) or what will happen to change demand (which requires a change in one of the determinants). More info can be found at http://www.freeeconhelp.com/2011/08/common-mistake-differentiating-between.html.
Views: 59557 Free Econ Help
How to derive a per capita production function from a general production function
 
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Deriving a per capita production function from a general production function. Production functions generally take the form of Y=f(k,L) so it would be interesting to find what the per capita form of the production function is. This would give you a more realistic estimate of standard of living or well being compared to the generic production function. for information about this process can be found at https://www.freeeconhelp.com/2011/07/deriving-per-worker-production-function.html where the video is also embedded
Views: 25141 Free Econ Help
The difference between endogenous and exogenous varaibles
 
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This movie goes over very simple examples of the difference between endogenous and exogenous variables with some examples using a demand function. This is most obvious in economics by looking at the price and quantity functions but it also has many another applications across the sciences. For example, in statistical regression analysis it is very important to understand which variables are endogenous to the systems and those that are external or exogenous. More information is available at http://www.freeeconhelp.com/2011/07/what-is-difference-between-endogenous.html
Views: 109694 Free Econ Help
What marginal benefit equals marginal cost means in economic terms
 
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This video goes over the classic equation in economics MB=MC. The video explains what it means, and how we can get to it with three different examples. Basically we care about efficiency. If marginal benefit is not equal to marginal cost then something is going wrong in the problem. Either our budget ran short or the firm is over/under producing. By looking at the context of the problem we can figure out what is going wrong and why marginal benefit is not equal to marginal cost within this context. It is also possible that market failures are occurring which is covered in another video. More information on this topic can be found at http://www.freeeconhelp.com/2011/10/what-causes-aggregate-supply-curve-to.html
Views: 107886 Free Econ Help
How to calculate producer surplus
 
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This video goes over what producer surplus is, and how to calculate producer surplus. More information on producer surplus and this video is available at http://www.freeeconhelp.com/2011/09/what-is-producer-surplus-and-how-to.html The trick to calculating producer surplus is to remember that producer surplus is the area beneath the market price and above the marginal cost curve. While producer surplus is NOT profit, it can be helpful to think of producer surplus as profit because it is the difference between the amount a firm is receiving and the price that it is paying to produce the individual unit of a good. (for those interested, producer surplus isn't equal to profit because it ignores fixed costs...).
Views: 48297 Free Econ Help
Cost push inflation shown on the AD AS graph
 
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This video goes over the concept of cost push inflation and what it looks like on the aggregate demand aggregate supply graph
Views: 30486 Free Econ Help
How to Calculate Consumer Surplus
 
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This movie describes what consumer surplus is, and how to calculate it with various changes in price, demand, and supply. More information can be found at: https://www.freeeconhelp.com/2011/09/what-is-consumer-surplus-and-how-to.html To summarize consumer surplus is equal to the area underneath the demand curve but above the market price. Another way to think about it is WTP - market price but you have to do this very every possible transaction (hence the triangle). This area can be thought of as the "bonus income" to the consumers because they get to obtain the good or service they desire at a price much lower than their maximum willingness to pay (hence consumer "surplus"). All of them are super lucky and happy--except for one... but it is still a voluntary transaction! Please comment below, I love when you find something helpful or if you have questions or criticism please feel free to share! Also, if you found this helpful remember to like and subscribe to freeeconhelp's channel: www.youtube.com/freeeconhelp/?sub_confirmation=1 Get Social: *********************** Our website: www.freeeconhelp.com Please like us on facebook at: www.facebook.com/freeeconhelp Follow us on twitter: www.twitter.com/freeeconhelp Below is a summary of the transcript for the video: :03.310, :07.020 All right this movie is going to go over how to calculate consumer surplus :07.020, :10.830 And what happens if we have some common changes in Consumer Surplus? :11.590, :13.179 so first :13.179, :16.438 consumer Surplus is easily calculated by :17.619, :23.849 First drawing our typical graph with price and quantity and then measuring out our demand curve :24.850, :30.930 So in order to calculate consumer Surplus we need this demand curve, and we need some price level :32.980, :34.440 We'll call it P star :34.440, :41.460 And then we need to know what this p upper limit is - because we need these numbers in order to calculate :41.8 , :43.270 Consumer surplus :43.270, :48.329 So consumer surplus is the difference between what you're willing to pay :48.610, :54.569 Which is how we construct this demand curve and what you actually have to pay so for each of these :54.850, :59.399 Consumers that are willing to pay a lot more than the actual price they have to pay 1: .129,1:07.469 So it's that area between the demand curve and the price paid that's going to be our consumer surplus 1:08.140,1:09.909 and 1:09.909,1:16.559 As you can see as long as we have linear demand curves consumer Surplus is going to be a triangle 1:18.640,1:23.430 So you have to know how to calculate the area of a triangle and if you don't I'll tell you it's 1/2 1:24.4 ,1:26.110 base 1:26.110,1:28.110 Times height 1:29.479,1:34.419 so let's go through an example if we're given a 1:35.780,1:38.979 curve so we have our q and p and 1:39.649,1:42.399 Our demand and our price 1:43.369,1:48.519 so what if price is five this upper limit price is 10 and 1:49.310,1:51.519 Our equilibrium quantity is five 1:52.520,1:54.610 Okay, so our formula Says 1/2 1:55.850,2:01.899 Base times height well what's the base here the base goes from 0 to 5? 2:02.720,2:04.720 so our base is 5 2:04.849,2:11.919 What's our height goes from 5 to 10 so our height is also 5 so 5 times 5 is 25? 2:12.799,2:19.209 1/2 times 25 gives us 12.5. So our consumer Surplus would be equal to 2:20.780,2:22.780 12.5 2:23.390,2:29.199 Now let's switch it up a little bit. What if we change we shift this demand curve 2:31.940,2:35.380 So let's say that it now intersects at 8 2:36.980,2:38.980 and 2:39.139,2:44.379 Price is still at 5. So this is our demand curve before 2:46.609,2:48.470 5 2:48.470,2:54. 9 Let's call this 3. This is our demand curve before for some reason it shifts left 2:54.010,2:56.590 And this is our new consumer Surplus 2:57.560,3:03.729 How do we calculate the area of that well it's going to be 1/2 times Base 3 3:04.069,3:07.988 Times Height 3 so our new consumer Surplus is 3:09.139,3:15.039 going to be 4.5. So if they ask us to calculate the difference in Consumer Surplus 3:15.560,3:21.130 It's going to be 12 point 5 minus 4 point 5. What is that going to give us? 3:22.430,3:29.260 8 so really to solve these problems all you have to do is shift that curve know what the values are 3:31.190,3:36.939 Calculate the areas of the triangles and then subtract one from the other to find the difference 3:40.070,3:42.070 you can also 3:42.180,3:45.950 Have a situation where the price increases 3:47.490,3:49.490 So if you have Q and p 3:51.9 ,3:53.9 Let's do 10 3:54.480,3:56.480 That's our demand curve 3:56.910,3:58.910 we have a p of 3:59.310,4:01.110 5P star 4:01.110,4:06.230 Or equilibrium quantity is 5 we know what the area of that is but now let's increase 4:07.050,4:08.220 our 4:08.220,4:09.510 p 4:09.510,4:12.739 Star Star, we'll call it to 7
Views: 310892 Free Econ Help
Per capita production function graph explained
 
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This video goes over the per capital production function graph, shows the diminsihing return to capital, and explains how the math for the production function translates into the graph. More information on the per capita production function can be found at http://www.freeeconhelp.com/2011/10/per-capita-production-function-and.html
Views: 17640 Free Econ Help
The difference between normal and inferior goods
 
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This movie goes over how depending on the type of good (inferior vs normal), a change in income could have different effects on the demand curve, for more information visit http://www.freeeconhelp.com/2012/02/how-change-in-income-changes-demand-and.html
Views: 38401 Free Econ Help
Introduction to IS LM model
 
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This video gives a brief introduction to the IS/LM model, explains the equations and what they mean, and why the curves have the slopes that they do. We explore the IS and LM curves and their relationship to the interest rate and GDP. The derivation and possible changes are covered in the video. More information on this topic is available at http://www.freeeconhelp.com/2012/04/what-is-is-lm-model-brief-introduction.html
Views: 61712 Free Econ Help
Demand pull inflation shown on the AS AD graph
 
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This video goes over an example of demand pull inflation and shows how it works on the Aggregate supply/Aggregate demand graph. More information at: https://www.freeeconhelp.com/2012/04/demand-pull-and-cost-push-inflation.html The trick here is to realize how inflation can pull the demand curve in the aggregate demand aggregate supply model. Since the price levels are going to be rising in this example we need to see how inflation interacts with the other determinants of AS and AD to get the new equilibrium.
Views: 43348 Free Econ Help
Convexity vs. Strict Convexity in economics
 
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This post discusses the difference between convexity and strict convexity in economics with respect to well-behaved preferences. Examples uses budget lines and indifference curves are presented. For more information, check out http://www.freeeconhelp.com/2014/07/strictly-convex-vs-convex-and-well.html
Views: 30014 Free Econ Help
Solving a budget constraint problem in economics
 
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This video goes over the solution for a budget constraint problem. It uses rice and beans as examples where the price of rice is $2 and the price of beans is $5. The problem asks to find the consumers income, and to draw a series of budget lines given different scenarios. Sometimes you are given information about a person's utility and you are asked to make it as large as possible subject to a budget. When you have to combine these two pieces of information it is important to know how to set it up graphically and how to find where the optimal consumption point will be in the budget constraint problem. More information about solving this problem can be found at http://www.freeeconhelp.com/2011/09/solving-budget-constraint-problem-in.html
Views: 52583 Free Econ Help
How to draw minimum wage on a supply and demand graph
 
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This video goes over the process of including a minimum wage (a price floor) on your typical supply and demand graph. More infomation on this topic can be found at http://www.freeeconhelp.com/2012/05/what-is-price-flloor-examples-of.html
Views: 20235 Free Econ Help
What shifts a PPF?
 
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This movie goes over some common examples of PPFs (production possibility frontiers) and what can cause them to change or shift. More information about this is available at http://www.freeeconhelp.com/2011/07/what-causes-shifts-in-production.html
Views: 34185 Free Econ Help
How to calculate deadweight loss
 
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This video goes over the basic concepts of calculating deadweight loss, and goes through a few examples. More information on this topic is available at http://www.freeeconhelp.com/2011/10/how-to-calculate-deadweight-loss-easy-4.html Deadweight loss occurs when market equilibrium is not equal to efficient equilibrium. This means that the marginal benefit of society is not equal to the marginal cost of society so there is a disconnect between the true benefits and costs. In this case, total surplus is not as large as it could be which means that there is a loss to society. Since this isn't a necessary loss, economists call it a "deadweight" loss meaning that we could easily remove it but nudging markets toward the efficient outcomes. Please comment below, I love when you find something helpful or if you have questions or criticism please feel free to share! Also, if you found this helpful remember to like and subscribe to freeeconhelp's channel: https://www.youtube.com/freeeconhelp/?sub_confirmation=1 Get Social: *********************** Our website: https://www.freeeconhelp.com Please like us on facebook at: https://www.facebook.com/freeeconhelp Follow us on twitter: https://www.twitter.com/freeeconhelp Below is a summary of the transcript for the video: 3.450,:10.519 This video is going to go over how to calculate deadweight loss and kind of describe. What Deadweight. Loss is so dead weight Loss :11.099,:13.099 arises from an :13.110,:15.110 economy not having the maximum :15.540,:16.920 Surplus possible :16.920,:21.860 So if we look at a perfectly competitive model we have our supply and demand lines :22.259,:26.238 The area above price and below demand is our consumer surplus :26.759,:28.2 the area :28.2,:31.189 below price and Above supply is our producer surplus :32.070,:37.189 So there's no Deadweight loss in this economy because surplus is maximized :38.670,:46.640 however if we were to institute a tax or there's an externality or something like that, then we would have a :48.420,:52.070 shift in one of these curves :53.399,:55.579 Where the Optimum should be? :56.909,12.869 Here, but instead we're here and so that difference 15.070,18.930 Between where we should be and where we are? 1:10.950,1:16.250 Gives us a Deadweight loss that's occurred in the economy so first What is a deadweight loss? 1:17.1,1:18.960 What's causing it? 1:18.960,1:23.089 It's a difference between Marginal cost and marginal benefit 1:23.340,1:29.210 so you'll notice that at our optimum we have marginal cost equally marginal benefit and 1:29.909,1:31.530 We're good 1:31.530,1:36.559 However if MC prime is our true Marginal cost in the economy 1:37.079,1:44.989 Then we do not have marginal benefit equal to marginal cost because we want to be here instead of here 1:45.390,1:48.439 So everywhere between these two curves 1:49.950,1:56.990 We have a difference between marginal cost and marginal benefit and that creates the deadweight loss 1:58.049,2:.049 So let's go through an example 25.049,2:11.129 We're going to begin our economy in equilibrium 2:13.810,2:20.399 and just to make things easy let's say that the initial equilibrium is 5 2:21.850,2:29.789 5 so then the government decides it decides that they want to institute a tax and let's call it a supply-side, tax 2:34.060,2:41.399 So that's supply plus t our new equilibrium is going to be at this point and let's just say that 2:44.769,2:47.309 results in a price instead of 6 a 2:48.519,2:55.709 quantity of 4 and then here this price that the suppliers receive is 4 2:57.250,3:.389 so here the quantity of the tax is 2 31.269,34.829 The line shifted up by the amount of to the suppliers 35.799,39.479 Take half the tax and the consumers take half the tax 3:10.209,3:14.219 So again remember with Deadweight loss we want to be here 3:14.799,3:17.429 at a quantity of 5 and a price of 5 3:17.829,3:23.459 but we end up it here at a quantity of 4 price after tax of 6 3:23.769,3:28.048 our sorry price before tax of 6 and price after tax of 4 3:28.660,3:31.229 So remember this is our marginal benefit 3:31.810,3:36.6 This is our marginal cost and this is our marginal cost plus the tax 3:37.269,3:41.129 So what's going on in the economy is at this point right here? 3:41.380,3:44.130 We're losing out on Potential Surplus 3:44.350,3:50.850 Because the true marginal benefit of the economy is still greater than the true marginal cost of the economy 3:51.040,3:53.040 It's just that the tax 3:53.290,3:54.760 has 3:54.760,4:.660 Taken away that potential because now suppliers have to pay a tax instead of realizing their true gains 41.299,47.319 So everywhere between the marginal benefit and marginal cost from this new quantity 48.440,4:12.239 To the old quantity is going to be deadweight Loss 4:14.740,4:19.469 the neat thing about this is just the area of the triangle and if you remember
Views: 232133 Free Econ Help
Horizontal and Vertical IS or LM curves explained
 
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This video goes over the intuition and the math necessary to have veritcal or horizontal IS or LM curves. A vertical IS curve is a special condition in which the IS curve has an infinite slope and goes completely up and down. The horizontal IS curve is a separate condition that causes it to have zero slope. Both the conditions with examples are explored at length. A vertical LM curve is a special condition in which the LM curve has an infinite slope and goes completely up and down. The horizontal LM curve is a separate condition that causes it to have zero slope. Both the conditions with examples are explored at length. More information on this topic can be found at http://www.freeeconhelp.com/2012/04/horizontal-and-vertical-is-and-lm.html
Views: 24295 Free Econ Help
An increase in supply shifts the supply curve down
 
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This video goes over the determinants of supply, and how the resulting changes can shift the supply curve. More information on this topic can be found at http://www.freeeconhelp.com/2012/02/increase-in-supply-shifts-supply-curve.html
Views: 13621 Free Econ Help
How to calculate point price elasticity of demand
 
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This video goes over the method of calculating point price elasticity of demand and gives a few examples. Point price elasticity works by finding the exact elasticity measure at a specific point on the demand curve (for the case of price elasticity of demand). In order to do this calculation you need to know a little bit about calculus, namely how to calculate a derivative. But don't worry, it isn't that difficult and the video will show you how to do it. Elasticity measures focus on finding the responsiveness of one variable to another. It is a classic example of an applied derivative (or a derivative in action). More information on this topic can be found at http://www.freeeconhelp.com/2012/04/how-to-calculate-point-price-elasticity.html
Views: 182658 Free Econ Help
What causes the aggregate demand curve to shift?
 
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This video goes over the determinants of aggregate demand, and how they can cause the aggregate demand curve to shift. More informaiton about this subject can be found at http://www.freeeconhelp.com/2011/10/what-causes-aggregate-demand-curve-to.html
Views: 26644 Free Econ Help
Answering the three fundamental questions of economics: What, how, and for whom.
 
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Answering the three fundamental questions of economics, what to produce, how to produce it, and for whom it is produced. This video is embedded at http://www.freeeconhelp.com/2011/06/three-fundamental-questions-every.html with appropriate text to go over the concepts.
Views: 24995 Free Econ Help
What are diminishing returns in economics
 
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This video goes over the concept of diminishing returns, more information can be found at http://www.freeeconhelp.com
Views: 20901 Free Econ Help
How a change in income affects demand
 
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This video goes over the effects that a change in income will have on the supply and demand model, and how equilibrium quantity and price will change. The video also includes a discussion of normal vs. inferior goods and what difference this will have on the resulting changes. More informaiton can be found on this topic at http://www.freeeconhelp.com/2012/02/how-change-in-income-changes-demand-and.html
Views: 7949 Free Econ Help
How to Solve Elasticity Problems in Economics
 
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This video goes over the equation and some examples of solving price elasticity of demand problems in economics. More information is available at http://www.freeeconhelp.com/2011/05/how-to-solve-elasticities-problems-in.html or http://www.freeeconhelp.com/2011/08/using-midpoint-formula-to-solve.html Essentially an elasticity measure looks at the responsiveness of one variable to changes in the other. In this case we are focused on the two economic variables of quantity and price. The easiest way to think about elasticity is to imagine a rubber band. The force on the rubber band causes it to stretch in a similar manner that a price change causes people to buy more or less of a product. The measurement of the relationship between this cause and effect in practice is called elasticity. More information is available at http://www.freeeconhelp.com/2011/05/how-to-solve-elasticities-problems-in.html or http://www.freeeconhelp.com/2011/08/using-midpoint-formula-to-solve.html
Views: 379484 Free Econ Help
How price is determined in perfect competition
 
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This movie goes over how price is determined in a perfectly competitive market. Sometimes its confusing to see the "price taker" idea applied, and this movie shows how the individual firm takes the price from the whole market as its price. More information on perfect competition and prices is available at: https://www.freeeconhelp.com/2011/09/calculating-equilibrium-values-for.html The trick here is to remember that firms operating in perfect competition are price takers and that price is determined in the market place. The equilibrium price from the market place is then transferred to the perfectly competitive firm's individual revenue and cost graph for analysis.
Views: 38662 Free Econ Help
Calculating Real GDP, savings and net taxes
 
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This video goes over a numerical example of how to calculate real GDP, income, savings and net taxes. More information on this subject can be found at http://www.freeeconhelp.com/2012/03/calculating-real-gdp-total-income-and.html The numbers included are from a sample problem using real information from the US economy. The trick here is to remember the simple equation of Y=C+I+G+NX when calculating GDP, the rest is plugging in the numbers that are given to you in the problem. However, it is a good idea to develop an intuitive understanding of what real GDP is which you can strengthen by watching the video and reviewing the article above.
Views: 47657 Free Econ Help
The difference between commodity and fiat money
 
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This money goes over the difference between commodity and fiat money with some examples of each. More information on this topic is available at http://www.freeeconhelp.com/2012/03/commodity-money-vs-fiat-money-whats.html
Views: 15927 Free Econ Help
How to calculate total surplus
 
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This video goes over the process of calculating total surplus with a few examples. The key point to remember is that total surplus is the sum of producer and consumer surplus. The video also shows a trick with using deadweight loss to quickly find differences in total surplus measures. More information on this process can be found at: https://www.freeeconhelp.com/2012/02/consumer-and-producer-surplus-with.html
Views: 85628 Free Econ Help
Making the Circular flow of income diagram, with government and trade
 
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This movie goes over the construction of the circular flow of income diagram. It includes government and the rest of the world in addition to the standard household and firm model. More information about this topic can be found at http://www.freeeconhelp.com/2011/09/introduction-to-macroeconomics.html
Views: 9040 Free Econ Help
What are Oligopolies and Oligopolistic Markets, an Introduction
 
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This movie goes over the characteristics of an oligopolistic market, showing how they can arise going over a few examples. More information is available at http://www.freeeconhelp.com/2012/02/what-are-oligopolies-and-oligopolistic.html
Views: 36400 Free Econ Help
How does crowding out affect the loanable funds market
 
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This video goes over the process of crowding out, and how it occurs in the loanable funds market. It starts with expansionary fiscal policy, and the need for the government to borrow which shifts the demand curve for loanable funds. More information is available on this topic at http://www.freeeconhelp.com/2011/11/market-of-loanable-funds.html
Views: 4982 Free Econ Help
Accounting versus Economic Profit
 
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This video discusses the difference between accounting and economic profit using an example about a taco shop. The main thing to keep in mind is that accounting profit does not include implicit or opporutnity costs in its analysis.
Views: 11104 Free Econ Help
What is a giffen good and what does the graph look like?
 
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This video goes over what a giffen good is and what the demand curve will look like for a giffen good. The trick to understanding a giffen good is that quantity demanded will increase as price increases. Why? Because the good itself is inferior, and it happens to be so inferior that when the price rises the income of the individual is restricted enough that MORE of the good has to be purchased. Eventually the individual will run out of money which then makes the demand curve look like its normal self. More information on this topic can be found at http://www.freeeconhelp.com/2012/01/what-is-giffen-good-example-with-graphs.html
Views: 60849 Free Econ Help
How to find equilibrium price and quantity for a monopoly
 
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This video goes over the method used to find the equilibrium price and quantity for a monopoly. The mathematical process is explained, and future videos will go over examples. A monopoly is one type of market structure that is covered in most introductory microeconomics courses. The trick to finding the profit maximizing output for a monopoly is to find the point where marginal revenue equals marginal cost. This point will show you the optimal level of output for the monopoly, then you need to figure out what they can charge for the good by checking the demand curve. More information on this topic is available at http://www.freeeconhelp.com/2012/03/how-to-find-monopoly-price-and-quantity.html
Views: 64476 Free Econ Help
How to find Nash Equilibrium in a 2X2 payoff matrix
 
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This video goes over the strategies and rules of thumb to help figure out where the Nash equilibrium will occur in a 2x2 payoff matrix. Generally you need to figure out what the dominant strategy is for each player and then use the dominant strategy of each player to see if a final cell ends up being the choice for both players. This is generally something that is reviewed during the oligopoly section of a course or perhaps during the game theory segment. You can find more information about this topic at: https://www.freeeconhelp.com/2012/02/how-to-find-nash-equilibrium-in-2x2.html
Views: 12320 Free Econ Help
What is a monopoly?  An economic definition
 
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This short video goes over what a monopoly is, with reference to market structure, and discusses the three conditions that need to hold with examples. More info is available at http://www.freeeconhelp.com/2011/06/what-is-monopoly-continuing-market.html The trick to remembering what a monopoly is with respect to the other market structures is to remember the characteristics that must hold in order for it to be a monopoly. For example, in order for a monopoly to exist it must have perfect control over its price and there must be no close substitutes. A monopoly is also going to be the only firm in a given industry. A monopoly also has significant barriers to entry that prevent other firms from competing with the monopoly in both the short run and the long run.
Views: 37988 Free Econ Help
The difference between Microeconomics and Macroeconomics
 
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This post covers the major differences between microeconomics and macroeconomics as well as some tips and tricks to remember the difference. Some basic vocabulary words are also introduced to help understand the difference. More information on this topic can be found at: https://www.freeeconhelp.com/2011/06/microeconomics-vs-macroeconomics-what.html
Views: 2460 Free Econ Help
How to get an A in your Economics class
 
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This post goes over best practices for acing or getting an A in an economics class. Strategies including getting to know your professor and how to think like an economist are discussed. For more information on these topics please visit http://www.freeeconhelp.com/2012/06/how-to-get-a-in-economics-class.html and http://www.freeeconhelp.com/2011/05/how-to-think-when-solving-problems-for.html
Views: 25876 Free Econ Help
How to draw a PPF or PPC
 
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In this movie we go over how to draw a PPF (production possibilities frontier) given information on various points from a table. The trick here is to take all of the information from the table and plot it value for value on the graph. This will give you a PPF also sometimes called a PPC (production possibilities curve) that shows all different possible combinations of goods/services that are possible with the given inputs. More information is available at: http://www.freeeconhelp.com/2011/06/how-to-draw-ppf-production-possibility.html where more information including a description and images are kept.
Views: 89403 Free Econ Help
Income elasticity of demand, what to know
 
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This video goes over the different possible income elasticity of demand values and describes what they mean. The 3 alternatives include normal goods, inferior goods, and luxury goods. More information on calculating the income elasticity of demand can be found at http://www.freeeconhelp.com/2011/05/calculating-income-elasticity-of-demand.html
Views: 21611 Free Econ Help
How specialization and trade helps both countries (get outside their PPF)
 
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This video goes over a typical gains from trade scenario where two countries are producing on their PPF, and then specialize and trade. The movie shows how by specializing and trading more of both goods can be produced in an economy. It is a very beautiful phenomenah because it is possible for everyone to consume more of everything without working harder or adding new inputs to the process. It sets the stage for modern jobs and the barter system. It is one of the reasons people go to College or University to learn to specialize! More information is available at http://www.freeeconhelp.com/2011/09/if-two-countries-specialize-how-many.html
Views: 47836 Free Econ Help
How shifts in supply and demand change equilibrium price and quantity
 
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This video goes over all the possible changes of equilibrium price and quantity given changes in supply and demand. More information and a printable table is available at http://www.freeeconhelp.com/2011/10/what-happens-to-equilibrium-price-and.html
Views: 4750 Free Econ Help
Solving opportunity cost problems, part 2 in the Gains from Trade series
 
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In this movie we look at how to solve for the opportunity cost of the two goods, this is part two in the solving a comparative advantage or grains from trade problem. The trick is to be able to draw the PPF and figure out who has the comparative advantage in which good. More information is available at http://www.freeeconhelp.com/2011/06/calculating-opportunity-cost-in-gains.html where I go through the problem with text and pictures.
Views: 41599 Free Econ Help