Ch 8 - Varian - Class 2 - Slutsky Equation скачать в хорошем качестве

Ch 8 - Varian - Class 2 - Slutsky Equation

🎥 Deeper Dive into the Slutsky Equation: Applications and Variations 🎥 In this video, we cover the advanced concepts of Chapter 8 from Varian's Intermediate Microeconomics, focusing on the applications and extensions of the Slutsky Equation. This is crucial for understanding consumer theory and its practical implications in economics. 🔑 Key Highlights: Sign of Substitution and Income Effects: -Understand why the substitution effect is always negative and how the income effect varies for normal and inferior goods. -Indian Example: Analyze how a price rise in essential commodities like onions affects the substitution and income effects differently across income groups in India. Law of Demand and Giffen Goods: -Explore the conditions under which the Law of Demand holds true and how the Slutsky Equation explains Giffen goods. -Indian Example: Discuss theoretical Giffen goods like coarse grains during extreme price shocks among low-income households. Compensated Demand Curve: -Learn about Hicksian (utility constant) and Slutsky (purchasing power constant) demand curves and their applications. -Indian Example: Relate this to welfare policies like LPG subsidy schemes where effective purchasing power is altered. Numerical Applications: Work through examples of price changes and income adjustments using real-life analogies. Indian Example: Calculate the substitution and income effects when the government increases taxes on fuel and rebates the revenue. Practical Implications: Discuss policies like tax rebates and real-time pricing using the Slutsky framework. Indian Example: Examine India's electricity pricing reforms, where consumers are incentivized to reduce usage during peak demand. 🔎 Possible Exam Questions: Explain the compensated demand curve. How does it differ from the ordinary demand curve? How does the Slutsky Equation justify the Law of Demand? Use examples of normal and inferior goods. Discuss the practical implications of the Slutsky Equation in tax policy. Illustrate with examples. Analyze how tax rebates affect consumption choices using the Slutsky framework. 🔔 Subscribe for more insights into economics! #Microeconomics #SlutskyEquation #ConsumerTheory #IndianEconomy #EconomicsExams