Educational Video Blog Post

This video is discussing one of the key Economics concepts  of the law of supply in demand.  The law of demand states that when the price goes up the quantity demanded decreases.  This is why demand curves of downwards sloping.  Price and quantity have an inverse relationship.  

Why does this happen?  Why is it an inverse relationship?

Substitution Effect - he idea that as prices rise (or incomes decrease) consumers will replace more expensive items with less costly alternatives.

Income Effect-  the change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service

Law of Diminishing Marginal Utility - while keeping consumption of other products constant - there is a decline in the marginal utility that person derives from consuming each additional unit of that product.


I think the the video was very effective at explaining the concept.  This is because he logically present the information in an order that most people will be able to understand.  At first he explained the big idea.  Then he got more specific and explained the drivers for this relationship.  To conclude he tied all of the concepts back together so that you could understand the big picture ( Supply and Demand)  I do think thought that it might have been helpful to have more graphics such as graphs to help explain the laws and effects.