Ch 22 Micro: Theory of Consumer Choice

In this video, I explain budget constraint and how it is affected by income effect, price/substitution effect & its slope for different types of goods. I also distinguish how that differs from indifference curve & its types for consumer's utility satisfaction. Lastly, I show how the combination of budget constraint and indifference curve determines optimization level & demand by comparing marginal rate of substitution (MRS) with wage.