17a. Cost Minimization, Production and Lagrangians

[a12b3t6m]

Man you make it so intuitive and easy to understand!!! Good work! Like it

[aewaterloo]

I've just watched a few vides and as a fellow university economics teacher, I think you're doing an amazing job. Keep up the good work!

[intromediateecon]

@aewaterloo Thanks!

[PhilyEcono]

Don't know if you're still checking these comments but I have a question!

Would you ever consider doing the Homogenous Production Functions of Perfect Substitutes and Perfect Compliments? Cobb Douglas is easy enough to grab but I'm challenged too much when trying to describe Perfect Subs and Comps..

Thank you for the other videos! You're far clearer than my current lecturer!!

[splashchampion]

I would recommend (highly) that you state the production function in terms of A*K^(lambda)*L(1-lambda). This represents the TFP constant, which must be divided into Q0, the output level, to properly solve the optimal levels K*,L*.

[hincapie12]

This is a really good explanation, thanx! though it would be good to have a numerical example at the end :)

[mzee101]

neo classical - chicago

[Mises4theWin]

Thanks. This helped a lot on my Math Econ homework.

[TEHPenance]

if i was given a certain budget, would i work from the cost function to find the quantity and then the optimal levels of K and L?

[Mo2103]

Nice work man the video is great, well explained.

[R2rGangstaFC]

the cobb-douglas functions are DEAD and have NO applicance is real economics. sorry

[joeyingles1]

Dude, seriously, the shaky camera, the small board and the constant skipping make it hard to follow you. I know this is a labor of love, but it's difficult to follow.

And skipping the algebra is a mistake. For the Cobb-Douglas function, it's okay since we know where it's going.

[mcs00713]

This video is excellent.

[vancegreen]

thank you soo much. its soo much clearer to me now.. :)

[rittub]

thanks man, great video!

[Julman75]

Two words: thank you :)

[3lizza]

=D, very very very very.... helpful!

[iHeartSyusuke]

quick question, why is l/k^1-alpha/k/l^alpha equal to L/K

[intromediateecon]

(L/K)^(1-alpha) / (K/L)^(alpha)

equals [by inverting and multiplying]

(L/K)^(1-alpha) * (L/K)^(alpha)

Then, you just add the exponents, when you multiply this out:

(L/K)^(1-alpha+alpha)

That equals L/K

[arpthatsme]

@iHeartSyusuke Watch (6:21 into the video and look at the formula) The 1- alpha exponent and the alpha exponent from the denominator operate by addition rules when the exponents are multiplied. He got the denominator (K/L)^alpha and multiplied its reciprocal to the numerator (L/K)^1-alpha. The reciprocal is just the switching of the fraction in the denominator. When you multiply them the exponents add and as such the exponents (1-alpha) +(alpha) give you one or (L/K) : )

[albertbeccu]

Thanks for the vid! Cleared some things up.

This would be exacly the same thing for a private consumers expenditure function right? But instead of C(Pl, Pk, Q0), the function would be called E(U, P1, P2) ?

And just think of the isokost as a budgetconstraint, and the isquant as a utilize "happyness" (or whatever it measures) ? :)

Regards,

[intromediateecon]

That's correct! Thanks for the comment.

[JakDa88]

Perhaps a little zoom in would have a been helpful.

[intromediateecon]

@JakDa88 Thanks for the input. I'll work on better camera angles in future videos.

[downstlnola]

Excellent video. Except skipping solving for L*, my algebra is a bit rusty and I'm not sure how to simplify it and its driving me crazy. Grrrrrrrrrrrrrrrr!

[downstlnola]

@downstlnola Nevermind solved it! Thanks for a great review man. Peace.

[tidusbl1tz]

Wow, your videos are really good, just watched all the ones available. You are clearly very knowledgeable in the area, and explain concepts very well. I understand everything, except for of course this video, but I did not expect to, as I clearly do not have your mastery in multi-variable calculus.

5 stars, amazing videos once again

[korrisha]

dont get it this vid was so so confusing

[intromediateecon]

Yes. I agree. If you are not **really** comfortable with calculus (i.e., multivariate calculus), you shouldn't watch this video.

Go watch Lecture 17, which is linked by this one.

Also, please don't downrate because something is on an advanced topic. Early on in this video, there's a slide that essentially said "don't watch it if you don't love calculus."