Optimal point on budget line | Microeconomics | Khan Academy

Using indifference curves to think about the point on the budget line that maximizes total utility

Microeconomics on Khan Academy: Topics covered in a traditional college level introductory microeconomics course

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[brandengomez]

I want to know how to mathematically find that optimal point using the prices given not just know where it is, why would you leave out the most important part

[Shoppahaulicc]

ok but calculating the point of tangency....? you just blanket over it and discuss the idea of it

[PSYCHOSTORM]

I still dont know exactly where the optimal point is on the budget line

[FishersofMenLeague]

the optimal point is where the indifference curve and the budget line intersect (aka the derivative of the indifference curve)

[blucclud]

I don't understand at 7:53 when he writes the quantity of fruit at two different prices. I think he is listing the price and its correspondent quantity at two different optimal points when we change the price of fruit, so when the price is $2, its quantity must be about 4 (not 8) for optimal point, isn't it???

[gauravupadhyay]

something is missing..you didn't explain indifference curves and jumped onto this..

[MrKobe]

if i have an utility function and a utility level, how should i calculate the optimal point?

[gdogvibes]

When the indifference curve hits the Budget Line, It creates "equilibrium points" where the Marginal Utility is not increasing or decreasing.

[xiafeicen]

The first optimal point, why is 2 and 8, not 2 and 5? Last slide

[k.obrien]

Can you do a video on these topics!!! Endowment Effect, Prospect theory. I love these videos, they are a huge help :)

[annapilon]

how did you determine where to draw the indifference curve though?

[rhystucker]

eh, i'm not too fussed about whether or not i know

[BangaruAmarnath]

Indifference curve is first introduced in which video?

[paulpaturel]

budget line definies the feasible set ?

[Heirlm]

Hey KhanAcademy - Could you upload more videos about French history?

[OnlyXfox]

you really are a smart man, thank you!

[IJmackdaddy]

a curve or set of curves on the same consumption space (graph) that represent combinations of goods that are equal in utility. the reason it's called an indifference curve is because the consumer would be indifferent to consuming any of the bundles on the curve....i hope that made some sense

[IJmackdaddy]

how so? doesnt help me much if you just say wrong lol

[bigfriki]

If there are infinite indifference curves, there also should be infinite optimums... ¬¬
This theory really contradicts itself pretty badly... can't believe noone's ever corrected this. Facepalm.