Introduction to Consumer Choice
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- Опубликовано: 28 ноя 2024
- Everyday, you make tons of decisions about consumption. Your choices about what and how much of a good to buy are influenced by the laws of supply and demand. These choices are nearly endless. For example, at Starbucks, each drink is highly customizable. In fact, they offer over 80,000 combinations!
When you buy a good or make a decision about how to use your time, you’re getting some sort of value, like a sense of happiness or satisfaction, out of it - economists call this “utility.” The increase in that value from buying an additional unit of a good or service is its marginal utility. When you make these decisions, you’re thinking at the margin, even if you don’t realize it.
Think about how wonderful a shot of espresso, or your beverage of choice, is first thing in the morning. You probably derive quite a bit of utility! But how about a second, third, or even fourth shot of espresso? With each extra shot, you probably get a little less utility. At some point, the cost will outweigh the marginal utility.
When you add up the satisfaction you get out of all of the shots of espresso, that is your total utility. Since each additional shot of espresso has a little less utility, economists refer to this concept as diminishing marginal utility.
This is true for all goods and activities, but the amount of utility and marginal utility depends on the individual. For example, let’s say that Starbucks drops the price of shot of espresso. This can change the quantity demanded on aggregate because for some people, the drop in price will make the marginal utility they derive from an extra shot now worth the cost. But perhaps that’s not true for you and your consumption will not change.
Are you starting to see how you instinctively think and act at the margin in your daily life?
Up next, we’ll explore other factors beyond price that affect your habits as a consumer, such as preferences and income.
Microeconomics Course: bit.ly/20VablY
Next video: bit.ly/2qBZauA
This was literally an amazing explanation. My brain comprehended this well
Very engaging and effective presentation. AP Micro teachers everywhere will thank you.
Excellent explanation. Very clear! thank you. I'll be waiting for the next one!
Excellent explanation. Great editing/effects. Awesome short video.
Great! Keep it up!
wonderful well - explained ! You are my hero today
tooooooooo good 😍😍😍😍😍😍😍
I LOVE YOUUUUUUUU!!! THANK YOU SO MUCH FOR MAKING IT EASY AND UNDERSTANDABLE!!! I AM SO GREATFULLLLLLLL
I wish my economics professor taught us this well!
This video is really well done, im a film major and I’m impressed
Prof girante, i can listen you for hours, I'm watching videos that are not even in my syllabus.
very well done
Do you have any idea,Professor Joana Girante, how easy you have made it ! :D Thank you for these video series.
Thank you for the excellent explanation. But I have one question. If marginal utility is a difference between consecutive utilities, there would be no marginal utility for the 1st expresso cup, right? But the video and practice question answers say the marginal utility of the first cup is the highest.
Excellent teaching skills
Very good : short and useful
Great video and thanks
Great one
That cleared up a lot of things for me. Thank you!
i love all your videos and wanna take a certification from u
my problem with diminishing marginal utility, is that you are assuming that all products bought are to be consumed in one go. What if I bought 10 chocolate bars and the utility I derived from 1 was 10 and then had another the next day and the 2nd chocolate bar again gave me 10 utility points. then surely the utility is not diminishing?
you are more than amazing
you guys are amazing!!!
What a simple way to explain the big subject.. thank you for that..
You made is so easy :)
Excellent
To all my Consumer Finance/Financial Studies Majors Good Luck on your studies!!!
Accounting is superior to Finance and Economics in every way.
0:56 I was listening through my earbuds and I thought I heard a gunshot outside.. it was the video lol!!!!!
Me To 😁😂
Venti iced skinny hazelnut macchiato?
Are there goods whose MU is always high?
What if those are not consumption goods ?
MU of money will be always high or say political power .
How about sex MU or narcotics drugs ?
whats your name??
👍👍👍👍👍👍👍👍👍
ruclips.net/video/o9LXiAl6rNg/видео.html
Cute mam
What about marginal utility of something like cocaine.beautiful teacher btw
😊
why your are not chanal on russian language?
Sponsored by Starbucks
uncany.
1:11 useless stats right there. 80,000 different combinations of drinks? so coffee with one sugar is different than a coffee with 2 sugars? wow what a useless statistic.
also, who the f*** drinks espresso here or even enjoys it? espresso is just concentrated coffee with not sweets or sugar. That shit is bitter. Use ice-cream instead, a lot more relatable example.