Sunday, March 28, 2010

Learning Economics on a Budget: Part V

It has been a while since I have provided an update on my YouTube project. If you have been following my blog, you know I have been posting videos on microeconomics to YouTube. I am doing this in an effort to make learning economics more accessible (and to sell my own book, which is only $10 for the e-book version).

Over the past few months, I have produced two units: welfare analysis, and single-price monopoly. I have also posted five other useful videos. This post summarizes these new additions. [If you are a feed subscriber, I think you'll have to click through to my blog to see the embedded videos]

Welfare Analysis (Chapter 5 of my book)

To start of my unit on welfare analysis, I introduced the concept of surplus. Specifically, this video demonstrates how to find consumer surplus and producer surplus on the graph.

Once you have an idea of surplus, you can think about policies that maximize the total amount of surplus. Maximizing total surplus is something I call The Efficiency Criterion. I show how to use this criterion in the second video in this unit.

The next application of the efficiency criterion after taxes and subsidies is the efficiency consequence of international trade. I demonstrate this in the third video in this series.

In some sense, there is a fourth video in this unit, but it requires knowledge of the next topic (monopoly). Don't worry. It's coming.

Single-price Monopoly (first part of Chapter 6 of my book)

The second unit I produced is on the economics of monopolies, which are firms that are the only supplier to an industry. The first video explains the basics of monopoly pricing. Specifically, I show why a monopoly faces a different problem than a competitive firm.

In the second video, I use simple calculus to show a fact I use in the first video about the form that marginal revenue takes when demand is linear. [Note: This one ended up being in HD format because I just uploaded the raw video without any edits.]

In the third video, I use calculus more intensively to explain why a monopoly prices on the elastic portion of the demand curve. At the end of the video, I give an intuitive justification for this (that's not really optimal for non-calculus folks, so I'll probably record another video with just that intuitive justification).

In my fourth (and most recent) video, I demonstrate the welfare analysis of monopoly pricing. This video actually fits within both units because it is on both using the efficiency criterion and showing the consequences of monopoly.

What other videos have I posted?

Over the past month or so, I have posted some other useful videos to YouTube. In case you are interested in out-of-sequence economics, here they are:

I completed the discussion of competitive firms' supply decisions by linking the short run to the long run.

In the next video, I demonstrate how to aggregate individual supply curves to obtain a market supply curve, and how to aggregate individual demand curves to obtain a market demand curve. The answer is "adding horizontally," and here's an example:

To help some students I know in real life, I posted this video on extensive form games, and how to solve them. FYI: After I finish my next unit on market failure, my plan is to do a unit on game theory. This video wouldn't be the first in a unit on game theory, but I think it is generally accessible, anyway.

In the last couple of videos, I prove and show some important key implications of The Envelope Theorem (a really important theorem in mathematical economics). Fair warning: This is math heavy.

Here's the second Envelope Theorem video. Lots of math here, too:

If you made it this far, you probably should join my 280+ YouTube subscribers. If you do, you'll get updates every couple of weeks about my most recent videos. If you like what is here, you may also like the other videos I have posted, and I plan to post plenty of new videos in the coming months.

My goal is to produce a useful resource for students of economics. The channel is still a work in progress, but from the comments, I think people are finding it useful. Maybe you will too.

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