Calculus & Microeconomic Models: First Order Condition & Second Order Condition

This video explains how to use calculus to solve a microeconomic model. We go over the first order condition and second order condition, and solve the time studying model. The basics.

A microeconomic modeling video.
0:00 - Set up of model
1:35 - Graphical depiction
3:25 - Why we need a 2nd Order Condition
3:58 - First order condition / Tangent = 0
6:05 - Marginal cost = marginal benefit
7:45 - Taking the 2nd Order Condition

[anthonyyacub]

Thank you very much! Wish you were the Prof in my class. We wasted 45 min and everyone was still confused.

[stevenfeldstein]

Great video!
Follow up questions:

1. What if the student wants to get the 4.0? Is that like revenue maximization? According to the model here it’s almost as if it’s not worth fighting for that A+...

2. When it comes to studying, one can argue that there’s a compounding effect, meaning the more one studies the more one understands the material and the more it sticks, which is contrary to the model you set up. How would you set up a model that represents that compounding benefit?

3. Is there a way to include the time constraint into this model as well?

4. (Not sure if this is really included in point 2 above) One could also argue that perseverance in studying has an additional benefit of improving studying habits overall and therefore the additional time spent studying actually changes one’s equations as one goes on studying. So perhaps an optimization model isn’t the right for altogether or what would be a model that captures that as well?

Thanks!!

[abuzainabahmadsyakirnorazli]

thanks for the lessons. came here just want to learn why we always do FOC and SOC to find max benefits/rev. helps a lot! take my subscribe!

[glafayettegorillo]

I still got throuh that video without any question marks - my 8th grade economics teacher would be so proud of me!

[justinberesford]

This series is super helpful - if you make a Coursera course, I'll be your first subscriber!

[valueengines]

Really well explained, I really like your stuff

[fefsable]

Great content, thank you very much! <3

[gabrielmota]

Does anyone have the book Microeconomics With Calculus - 1997?

[j.augustiney.vallai]

how to find: FOC & SOC given the equaltion Tc = 100 +60Q-12Q2+Q3

[romankohli]

Wouldn't the second derivate be -0.25s^-1.5 - 0.2 ?