2 The general Consumer Problem

In this video, the tutor delves into consumer theory in microeconomics. They introduce the concept of demand determination beyond given willingness to pay, focusing on a two-good problem (X and Y). The tutorial explores budget constraints, with income spent equally on both goods. Key aspects include plotting the budget constraint, recognizing its slope as price ratios, and understanding trade-offs between X and Y. The consumer's problem is then discussed: maximizing utility given infinite points on the budget constraint. Indifference curves are introduced to represent utility level sets, with various shapes explored (linear, smooth, L-shaped, perfect complements). The video concludes by highlighting key topics for future videos. Subscribe to @AxiomTutoring for more.