Shadowing Practice: 1. Introduction and Supply & Demand - Learn English Speaking with Video
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JOHN GRUBER, This is 14 .01.
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I'm John Gruber, and this is microeconomics.
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Today I want to cover three things.
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I want to talk about the course details.
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I want to talk about what is microeconomics, and then I'll start the substance of the course by talking about supply and demand.
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A couple of the points about the course.
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The course will have a distinct sort of policy angle to it.
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I sort of do economic policy as government policy is my thing.
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So I think it's what makes economics exciting.
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And it sort of offers, I think, an interesting angle to understand why we're learning what we're learning.
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I think sometimes in an intro class, it's sort of hard to understand why the heck you're doing things.
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However, that's just sort of a slight flavor.
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If you're really more interested in this, I teach a whole course called 1441.
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I'm not teaching it this year but it'll be taught by a visitor in the spring,
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Kristen Butcher from Wellesley, and I'll be teaching it next year, that dives much more into these policy issues.
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So I'm going to use government policy as an organizing theme, but it won't be the dominant theme of the class.
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Finally, three points about my teaching style.
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I don't write everything in the board.
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We're not in high school anymore.
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You're actually responsible for what I say, not what I write.
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Partly that's because my handwriting is brutal, as you can tell already.
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So what that means is, please, please do not be afraid to ask me what the hell I just wrote on the board.
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OK, there's no shame in that.
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Don't just lean to your neighbor and say, what the hell is writing the board?
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Like, ask me.
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Because if you can't read it, I'm sure someone else can't read it.
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So feel free to ask.
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And in general, please feel free to engage with questions in this class.
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The other point of my teaching style is I talk way too fast.
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And the longer I go, there's a mathematical function, which is the longer I go without interruption, the faster I speak until I just spin off.
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OK?
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So basically, please ask questions.
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If anything's not clear or you just want to ask a question about some related tangent or whatever, please feel free to do so.
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You might think, how would that work in a class this big?
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There's always way too few questions, even a class this big.
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So never be afraid that it'll slow me down or whatever.
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Ask a question.
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We have plenty of time in the class.
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And you'll be doing your classmates a favor, because it'll slow me down.
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Finally, last point, I have this terrible tendency tendency to use the term guys in a gender neutral way.
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So this class I like to see looks like it's a fairly healthy representation of both males and females.
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When I say guys, I don't mean men.
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I mean people.
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I mean people.
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So women don't take it personally.
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Guys means economic agents.
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It means people.
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It doesn't mean men.
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It's just a way, just a bad tendency.
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Drives my wife crazy.
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But I've decided better to just apologize up front than try to fix it throughout, which is impossible.
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OK, so let's talk about what is microeconomics.
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OK?
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So fundamentally, microeconomics, how many people took AP high school econ?
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OK.
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How many people, for how many people was it taught really well?
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OK.
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That's about right.
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That's why I did my high school online class.
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That's the answer I wanted to hear.
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OK.
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So tell your friends still in high school who are taking high school econ, if your high school econ teacher isn't great,
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tell them to go on edX and take the class and help out your friends still in high school.
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OK, so what is microeconomics?
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Microeconomics is the study of how individuals and firms make decisions in a world of scarcity.
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Scarcity is what drives microeconomics.
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OK?
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Basically, what microeconomics is is a series of constrained optimization exercises.
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where economic agents, be they firms or individuals, try to make themselves as well off as possible, given their constraints.
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Yeah?
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Will this cover your rationality?
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I will, but not as much as I should.
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Essentially, we have another course in the department called 1413, Behavioral Economics, which gets into that much more.
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I will sprinkle it throughout, but not as much as I actually believe in it.
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In other words, the way we think about economics is it's best to sort of get the basics down before
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you start worrying about the deviations.
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Find it better to climb the tree before you start going out in the branches.
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OK, so basically, what this course is then about is it's about trade -offs.
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It's about how do you, given that you're constrained, how do you trade off things to make yourself as well off as possible?
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And behind this notion of trade -offs is going to be, I'll say about 100 times,
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this is the most important thing in the course, so just ignore that.
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But this is one of the most important things.
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I'll say one of the most important things in the course is the notion of opportunity cost.
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Opportunity cost is a very important concept that we teach.
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So the first concept we teach,
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which is that every action or every inaction has a cost and that you could have been doing something else instead.
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So if you buy a shirt, you could have bought pants.
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If you sit at home and watch TV, you could have been out working.
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Everything you do has a next best alternative if you could have done instead.
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And that is called the opportunity cost.
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And that's a critical concept in economics.
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And that is why, in some sense, we are called, referred to casually, as the dismal science.
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Economics are referred to as the dismal science.
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First of all, I'm flattered we're considered a science.
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But we're called the dismal science because our whole point is that nothing is free.
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There's always a trade -off.
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There's always an opportunity cost.
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Anything you do, you could be doing something else instead.
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And your constraint optimization means you're going to have to pass up one thing to do another.
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Now some may call it dismal, but as a former MIT undergraduate, I call it fun.
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And this is why I think MIT is the perfect place to be teaching economics.
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Because MIT engineering is all about constraint optimization.
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That's what engineering is.
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And economics is just the principles you learn in engineering applied in different contexts.
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So if we think about the 2007 contest, that still exists with the robots?
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2007?
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Yeah.
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The 2007 contest, those of you who know,
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is a contest where you're given a limited set of materials and you have to build a robot that does some tasks,
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like pushing ping pong balls off a table or something like that.
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That's just constrained optimization.
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It's got nothing to do with economics, but it's constrained optimization.
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So just think of microeconomics as like engineering, but actually interesting.
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So think of microeconomics as engineering, but instead of building something to push a ping pong ball off tables,
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you actually build people's lives and businesses and understand the decisions that drive our economy.
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So it's the same principles that you could think of for your engineering classes, but applied to people's lives.
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And that's why, in fact, modern economics was born in this room, either this room or 26 -100, by Paul Samuelson in the 1940s and 50s,
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who wrote the fundamental textbook that that gave birth to modern economics,
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because he was here and applied the kind of engineering principles of MIT to actually develop the field of modern economics.
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What we'll learn today was developed at MIT.
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So it's a great place to be learning it.
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Now, with that as background, any questions about that?
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About what is microeconomics?
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OK, with that as background, let's turn to the first model we'll talk about this semester, which is the supply and demand model.
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supply and demand.
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Now, the way we're going to proceed in this course is going to drive you crazy.
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Because we're going to proceed by teaching very, as the very first question pointed out, by teaching very simplified models.
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We're going to essentially, what is a model?
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A model is technically description between any two or more economic variables or I need two or more variables.
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But unlike the models you use in all your other classes, these aren't laws, by and large.
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They're models.
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So we don't have a relationship between energy and mass, which we can write down.
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It's a law, and we're done.
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We have models which are never 100 % true, but always pretty true, pretty being somewhere between 10 % and 95 % true.
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So basically, the idea is to make a trade -off, we want to write down in our models a set of simplifying assumptions
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that allow us with a relatively small set of steps to capture relatively broad phenomena.
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So it's essentially a trade -off.
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On the one hand, we'd like a model that captures as well as possible the phenomena in the real world, like equals mc squared.
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But we want to do so in the most tractable possible way
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so that we can teach it from first principles and don't need an hour to teach every single insight we have.
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So basically, in economics, we tend to resolve that by erring on the side of tractability.
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That is why I can teach you the entire field of microeconomics, which is really sort of macro is kind of a fun application.
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Micro is really economics.
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I can teach you the entire field of microeconomics in a semester
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because we're going to make a whole huge set of simplifying assumptions to make things tractable.
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But the key thing is that you will be amazed at what these models will be able to do.
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With a fairly simple set of models, we will be able to offer insights and explain a whole huge variety of phenomena.
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Never perfectly, but always pretty well.
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Generally pretty well.
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OK?
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And so that is essentially the trade -off we're going to try to do this semester.
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So the line I like is the statistician, George Box, said that all models are wrong, but some are useful.
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Now, obviously, it doesn't apply to models in the hard sciences, but in the social sciences, that's true.
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And basically, I'm going to write down a set of models like that.
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Now, with every model I write down, my goal is to have you understand it at three levels models.
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The first and most important level is the intuitive level.
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The level which you sort of understand, I call it passing the mom test.
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You can go home and explain it to your mom at Thanksgiving or at the end of the semester.
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No offense to dads.
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Just call it the mom test.
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So basically, that's the intuitive level.
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You really understand it a way that you could explain it.
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The second is graphical.
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Most of our models here will develop in a graphical framework work, using x, y graphs, that were really weak in economics,
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we think delivers a lot of shorthand power.
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And the third is mathematical.
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The mathematical is probably the least important, but it's the easiest to test you on.
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So we're going to need to know things mathematically as well.
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OK?
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So let's start by considering the supply and demand model by using the famous example brought up by Adam Smith.
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Adam Smith is sort of considered the father of economics.
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Paul Samuels is the father of modern economics.
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Adam Smith's the father of all economics.
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His 1776 book, The Wealth of Nations, did an incredible job of actually laying out the entire core of the economics field.
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No math, just words, but kind of he just nailed it.
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And he started, one of his most famous examples was the water diamond paradox.
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He said, think about water and diamonds.
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He said, start with water.
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Nothing is more important for life than water.
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It's the building block of all of life.
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Even when we look for life on other planets, we always start by looking for water.
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Now think of diamonds, one of the more frivolous things you can buy,
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certainly irrelevant to leading a successful or happy or productive life or any life.
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Yet, for most of us, water is free and diamonds are super expensive.
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How can this be, Adam Smith asked.
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Well, the answer he posed is that what I first described was just demand.
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That is, we demand lots of water.
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We demand fewer diamonds.
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But we have to match that with the concept of supply.
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And the supply of water is almost infinite, while the supply of diamonds, maybe not naturally.
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Maybe it's through decisions of various businesses.
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But it's somewhat limited.
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So basically, what he developed is what we call the supply and demand scissors.
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that you can't just think of supply or demand in isolation.
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You have to put them together if you want to explain the real world phenomenon we see,
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like the fact that water is cheap and diamonds are expensive.
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So let's talk about an example.
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So there's one graph that was handed out in the back, which is let's talk about the market for roses.
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So in the market for roses, we have a demand curve and a supply curve.
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So what we have here, this is the kind of xy graph we're going to look at all throughout the semester.
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On the x -axis is the quantity of roses.
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On the y -axis is the price of roses.
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The blue downward sloping line is the demand curve.
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Now, what I'm going to do here, I'm Just give me an overview.
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We are going over the next five or six lectures, dive into where this demand curve comes from.
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We'll go to first principles and build it back up.
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But for now, we need to know about demand curve is it simply represents the relationship
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between the price of a good and how much people want it.
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Therefore, we assume it is downward sloping.
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At higher prices, people want less of the good.
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And we'll derive where that comes from shortly, starting next lecture.
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But for now, I think it's pretty intuitive that if the price of roses is higher, people want fewer of them.
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And that's why it's downward sloping.
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OK?
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That basically, as the price of roses goes up, people want fewer roses.
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The yellow curve is the supply curve.
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Now after we've derived the demand curve, we'll then go and spend about 12 lectures deriving the supply curve.
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That's a bit harder.
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But once again, we'll start from first principles and build it up.
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For now, you just need to know is that's how much firms are willing to supply given the price.
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So basically, as the price goes up, firms want to produce more roses.
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The higher price means you make more money, so you want to produce more of them.
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This is slightly less intuitive than demand, but we'll derive it and explain how it can be.
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But for now, just go with the basic intuition that if you're making something, and you can sell it in the market for a higher price,
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you're going to want to make more of it.
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OK?
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And that leads to the upward sloping supply curve.
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Where the points meet is the market equilibrium.
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Where supply and demand meets is the market equilibrium.
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OK?
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That is the point where both consumers and producers are happy to make a transaction.
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Consumers are happy because they are on their demand curve is the 0 .600, is the 0 .3 dollars and 600 roses.
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That is, they are willing to buy 600 rows at $3.
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Producers are happy because on their supply curve is the same point.
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They are willing to supply 600 rows at $3.
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That is the one point where consumers are happy and producers are happy.
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Therefore, it's the equilibrium, highly non -technical.
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But that's the basic intuition.
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The point at which they're both willing to make that transaction, the point at which they're both satisfied with that transaction is the equilibrium,
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which in this case
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This case is $3 per rose and 600 roses.
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Now, this raises lots of questions.
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Where do the curves come from?
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How does equilibrium get achieved?
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Why the heck do we give roses?
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These are a bunch of questions.
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We will come to all these questions over the next set of lectures.
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But the basic thing is to understand this intuition of Adam Smith's supply and demand model.
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OK?
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Questions about that?
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OK.
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OK, now, this model also raises another important distinction that we'll focus on this semester, and it's easy to get mixed up.
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So I want you to, if you're ever unclear, I want you to ask me about it.
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And that's the distinction between positive versus normative analyses, positive versus normative.
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Positive analyses is the study of the way things are, while normative analyses is the study of the way things should be.
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Positive analysis is the study of the way things are, while normative analysis is the study of the way things should be.
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Let me give you a great example, which is eBay auctions.
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Auctions are a terrific example.
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They're like the textbook example of the competitive market.
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You can see it in your head.
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Demand comes from a bunch of people going on and bidding.
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People who want it more bid more.
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So you actually get a demand curve.
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The higher the price, the fewer people you're getting to bid.
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Supply is how many units of it are for sale on eBay.
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You bid until those two meet.
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And then you have a market equilibrium at that bidded price.
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Now, one example of an eBay auction that got a lot of attention a number of years ago, early in the days of eBay,
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was someone offered their kidney for auction.
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They said, look, I got two kidneys.
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You only need one to live.
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There are people out there who need a kidney.
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I'm putting my kidney on eBay for auction.
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And what happened, bidding went nuts.
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It started at $25 ,000.
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It climbed to $5 million before the auction was shut down.
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And eBay decided they wouldn't allow you to sell your body on eBay, bodily parts on eBay.
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OK?
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OK?
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So this raises two questions.
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The first is the positive question.
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Why did the price go so high?
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So what's the answer to that?
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What's the answer to the positive question?
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Somebody wants to be kidney.
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OK.
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Good answer, but let's raise hands and give answers.
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That's part of it.
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Yeah?
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Low supply, high demand.
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Demand is incredibly high, because I die without it.
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Supply is low, because not a lot of us are willing to sell their kidneys on eBay.
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OK?
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OK?
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So low supply, high demand led to a high price.
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Adam Smith at work.
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That's the positive analysis.
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OK?
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But then there's the normative question, which is, should you be allowed to sell your kidneys on eBay?
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That's the normative question.
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The positive question is, what happens if you do?
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The normative question is, should you?
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Now, the standard economics answer to start it would be, of course you should.
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We're in a world where thousands of people die every year because there's a waiting list for a kidney transplant.
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And these are people who would happily pay a lot of money to stay alive, I presume.
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Meanwhile, there's hundreds of millions of people walking around with two kidneys who only need one.
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And many of these people are poor, or, and lives could be changed by being paid a million dollars for their kidney,
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and might be happy to take the risk that one kidney will be fine, as it is for most everyone for most of their life,
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in return for having the life -changing payment from a stranger.
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So economists would say, look, here's a transaction that makes both parties better off.
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The person who gets the kidney gets to stay alive, and they are willing to pay a huge amount for that.
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The person who sells the kidney in most probability is fine, because almost all of us can make it through life fine with one kidney,
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and can get a life -changing amount of money that could allow them to pursue their dreams in various ways.
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So that's the standard argument would be, yeah, you should be able to sell your kidneys on eBay.
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So the question is, why not?
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Why would we want to stop this transaction?
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What are the counter arguments to that?
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Let's raise their hand.
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Yeah.
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Potentially, I think maybe the issue was because of eBay, there's no way to regulate it.
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Or you don't necessarily know people could be selling fake kidneys, per se.
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Right.
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So the first type of problem comes out of the category we call market failures.
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Market failures are reasons why the market doesn't work in the wonderful way economists like to think it should.
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So for example, this answer puts up that could be the problem of fraud.
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People might not be able to tell if they're getting a legit kidney or not.
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There could be the example of imperfect information.
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Do you know what the odds are that you can spend the rest of your life with only one kidney?
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I don't either.
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We ought to know that before we start selling our kidneys.
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There could be imperfect information.
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These are the kinds of, this is one type of problem, which is the market may fail.
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Yeah?
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The current system also helps people who are poor and have failed kidney,
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and which are people who would be completely screwed by the water in that post -discomptive.
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A second problem is what we call equity or fairness.
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Equity or fairness, which is we would end up with a world where only rich people would get kidneys.
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Currently, there's a bunch of voluntary donors and people who are in accidents who have kidneys left over.
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And those go to people on the base of where they are on a waiting list.
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It's actually a prioritized waiting list.
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It's kind of a cool one of my colleagues, Nikhil Agarwal.
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If you think about it, I'll talk a lot this semester about the imperialistic view of economics, all the cool things we can study.
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So he actually uses economic models to study the optimal way to allocate organs to individuals.
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Right now, it's just done based on a waiting list.
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But it may be that someone further down the waiting list needs it more than someone higher up the waiting list,
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because they're more critical or whatever.
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So there's various often ways to allocate.
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But certainly, often the way to allocate wouldn't be the rich guy gets it first.
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That would be unlikely to be what society would necessarily want.
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So there's an equity concern with that.
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What else?
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What other?
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Yeah?
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You might have a situation early.
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Since you know you can make money off of selling kidneys and you take advantage of people, it's very bad for kidneys.
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GARY GENSLER - Right.
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So there's sort of a third.
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It's related to fraud.
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But there's sort of a third class of failures that gets into the question about behavioral economics that was raised earlier,
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which we can just call sort of behavioral failure.
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Behavioral, it's called behavioral economics, for want of a better term, which is essentially, people don't always make decisions in the perfectly rational,
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logical way we will model them as doing so this semester.
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People make mistakes.
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That's a word we hate using economics.
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We hate saying mistakes.
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Ooh, boo, mistakes.
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Nobody makes mistakes.
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We're all perfect little economic beings.
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But we know that's not true.
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Increasingly, over the past several decades, economists have started incorporating insights from psychology into our models.
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To not just say people make mistakes, that's a lackadaisical, but to rigorously model the nature of those mistakes
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and understand how mistakes can actually happen due to various cognitive biases and other things.
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In this world, you can imagine people could make mistakes.
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They could not really sit down and quite understand what they're doing.
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And they could have selling their kidney when it's really not in their own long -term interest.
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Yeah?
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Could an example be like, if there's a family that's in extreme poverty, even though they only have one kidney,
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they might sell the other one just to give them more money for the family, per se?
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Well, I mean, in some sense, that would be, once again, if we took this factor out,
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if the market works well with its own behavioral effects, we'd say, well, you know what?
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That's their decision.
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You know, if they otherwise they starve, who are you to say?
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OK.
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But once you choose this, say, well, wait a second.
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Maybe they're not evaluating the trade -offs correctly.
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Even if there's no fraud, even if there's perfect information, they may not know how to process that information correctly.
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OK.
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But that is not standard economics.
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That's not what we'll spend a lot of time on this semester.
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But it's obviously realistic.
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OK?
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So those are a bunch of good comments, great comments.
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And then, yeah?
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Also in the elastic demand, such that people will always need kidneys for - GARY GENSLER - That won't turn out to be a problem.
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That doesn't turn out to be a problem.
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OK, and we'll come back.
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That's a great comeback.
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We'll talk about the shape of demand curves.
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We want to return to that question in a few lectures, but that doesn't actually cause a problem.
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It's just that's more of a positive thing about why the price is so high.
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But it's not a normative issue about whether you should allow it or not.
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OK?
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OK?
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So basically, these are exactly, this isn't, to me, honestly, I spend my life thinking a lot about these things.
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I think these are really interesting issues.
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But you can't get to the normative issues without the positive analysis.
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You need to do the positive analysis, you need to understand the economic framework before you can start jumping and drawing conclusions.
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That's no fun.
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We all want to jump to draw conclusions and saying, this should happen, this shouldn't happen.
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You can't do that.
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We have to be disciplined.
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We have to start with the fundamental economic framework.
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OK?
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OK?
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And basically, the bottom line, you know, I said I'll teach this course with a policy bent.
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But you have to recognize that economics at its core is a right wing science.
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Economics at its core is all about how the market knows best, OK?
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And that basically governments only mess things up.
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That's sort of the basic, a lot of what we'll learn this semester.
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As the semester goes on, we'll talk about what's wrong with that view and how governments can improve things.
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Indeed, I teach a whole course about the proper role of of government and economy.
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But the standard of economics is the market knows best.
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And that leads us to the last thing I want to talk about, which is basically, how freely should an economy function?
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Let's step back to the giant picture.
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Let's step back from a market for roses to the entire economy.
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How freely should an economy function?
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We have what's known as a capitalistic economy.
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In a capitalistic economy, firms and individuals decide what to produce and consume, may be subject to some rules of the road set by the government.
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There's some minimal rules of the road to try to avoid fraud or misinformation.
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But otherwise, we let the dice roll.
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Firms and consumers decide what to do.
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Now, this has led to tremendous growth.
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America was not a wealthy nation.
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It was not a very wealthy nation 100 years ago, 150 years ago.
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It's led to tremendous growth where we are now still in the most powerful and wealthiest nation in the world,
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largely driven by the capitalistic nature of our economy.
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On the other hand, we are a nation with tremendous inequality.
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We are by far the most unequal major nation in the world.
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The top 1 % of Americans has a much higher share
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of our income than in any other large country in the world, any other large developed country in the world.
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The bottom 99 % has less of our income corresponding than anywhere else.
442
So it's led to major inequality.
443
And it's led to other problems.
444
It turns out that the government can't appropriately set the rules of the road to avoid things like fraud, as we saw with Enron,
445
if you remember back to that, or a lot of what happened during the financial meltdown.
446
It turns out it's hard to get people perfect information, et cetera.
447
So we've seen the problems.
448
We've grown very wealthy as a nation.
449
We've introduced a whole set of problems through this system.
450
Now, the other extreme is what's called the command economy.
451
Rather than a capitalist economy, it's what's called the command economy.
452
In this case, the government makes all the production and consumption decisions.
453
The government doesn't just set the rules of the road.
454
The government owns the road.
455
The government says we're going to produce this many cars this year, and people can get them in some way.
456
It could be a lottery, it could be waiting in line.
457
However, we decide to allocate them.
458
We're not going to let the market allocate them.
459
We, the government, will allocate them.
460
We'll allocate how many get produced and who gets them.
461
And this was the model of the Soviet Union that I grew up with.
462
This was the pre -1989 Soviet Union.
463
The government decided how many shirts, cars, TVs, everything.
464
It's sort of bizarre to think about.
465
Literally everything, the government decided how much to produce.
466
And by and large, the government decided who got it partly through corruption.
467
That is, the party members, party leaders got it first.
468
and often just through waiting in line for the remaining application.
469
Now, in theory, this ensured equity by making sure that everybody shot a thing.
470
In practice, it didn't work well at all.
471
And actually was what dragged down the collapse of the old
472
Soviet economy, was that the command model simply doesn't work.
473
Partly, there's just too many opportunities for corruption.
474
When the government controls everything, That means there's no checks and balances on the opportunity for enormous corruption.
475
The capitalist economy puts some natural checks and balances on that.
476
And partly because it turns out that it's hard to control human nature.
477
And Adam Smith had it right.
478
Adam Smith talks about the invisible hand of the capitalist economy.
479
The invisible hand is basically the notion
480
that the capitalist economy will manage to distribute things roughly in proportion to what people want.
481
And that's where folks want to be.
482
Folks who want a certain kind of car are going to want to get to that kind of car.
483
And if the government has it wrong, they're going to get upset, and it's going to lead to a less functional economy. So basically,
484
Adam Smith's view is that the invisible hand view is
485
that consumers and firms serving serving their own best interest will do what is best for society.
486
So the fundamental core of the capitalistic view is the consumers and firms serving their own best interest
487
will do what ends up being best for society.
488
And that's essentially the model we'll learn to start in this course.
489
Yeah?
490
In that definition, are we defining best for society as in everybody has the most money,
491
or everyone has the best health or the best income living?
492
What is best for society?
493
GARY GENSLER - Great, great question.
494
We're going to spend a lot of the semester talking about that.
495
For now, we're going to find best for society as the most stuff gets produced and consumed.
496
That's how we're going to find it.
497
Obviously, you've raised a set of issues about what about pollution, what about health, et cetera.
498
We're going to come to those.
499
But for the first 2 thirds of the course, best for society means what we're going to call maximum surplus,
500
which which is the most stuff gets produced at people value.
501
So that's how we're going to do it.
502
And in his view, the visual hand does that.
503
And by and large, it's a very helpful framework to turn to.
504
However, it can lead to outcomes that are not very fair.
505
So the way we're going to proceed in this course
506
is we're going to start by talking about how Adam Smith's magic works.
507
How does the magic happen?
508
How does individuals and firms act in their own self -interest
509
without caring about anybody else end up yielding the largest possible productive economy?
510
How does that happen?
511
And we're going to talk about that.
512
We'll start with demand, which is how do consumers decide what they want given their resources.
513
We'll talk about the principle of utility maximization, the idea that I have utility function, that I can mathematically write down what I want.
514
I'll have a budget constraint, which is the resource I have, and then we'll do constrained optimization.
515
We'll say, give them what I want and the resource I have.
516
What decisions do I make?
517
Boom, we get the demand curve.
518
Then we'll turn to supply.
519
And we'll talk about how do firms decide what to produce.
520
That's much more complicated, because firms have to decide what inputs to use and what outputs to produce.
521
And we'll talk about how firms can operate in very different markets.
522
There's a competitive market that Adam Smith envisioned.
523
But that doesn't always work.
524
Sometimes we get monopoly markets, where one firm dominates.
525
And you can actually have outcomes which aren't the best possible outcome, even with the invisible hand.
526
So we'll talk about different kinds of markets.
527
Then we'll put it together to get market equilibrium and talk about sort of Smith's principles.
528
And then from there, we'll talk about how it breaks down in reality,
529
different changes in reality, how there are various market failures that can get in the way.
530
Why we have to care about equity and what implications that has, about behavioral economics, about a set of other factors.
531
So that's basically how we're going to proceed this semester.
532
As I said, the lectures are important, but the recitations are as well.
533
Once we're sort of in steady state,
534
the recitations will be about half new material and half working through problems to help you prepare for the next problem set.
535
So the problem sets are going to work is the problem set that's assigned
536
will cover material that's taught up to that date.
537
So for example, problem set one is going to be assigned next Friday.
538
That will cover everything you've learned up through next Wednesday.
539
Therefore, in section on next Friday, we'll do a practice problem, which you should understand because it'll cover things we've taught in class.
540
And it'll prepare you for the problem set.
541
And we'll do that every week.
542
That about half the sections.
543
The other half of the section will be new material.
544
This Friday, this section on Friday, is all new material.
545
What we're doing Friday is cover the mathematics.
546
I don't like doing math.
547
I always get it wrong.
548
So I leave math for the TAs who are smarter than I am.
549
So this Friday, we're doing the mathematics of supply and demand and how you take the intuition here
550
and the simple graphics and actually turn it into mathematical representations, which is what you need for the problem sets.
551
That this Friday, then we'll come back on Monday and start talking about what's underneath the demand curve.
552
All right?
553
Any other questions?
554
OK.
555
I'll see you on Monday.
556
Thank you.
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Vocabulario y notas de pronunciación para esta lección
Esta lección de conversación se basa en el vídeo “1. Introduction and Supply & Demand”. Las palabras que más se repiten: economic, demand, model, kidney, supply. Este vídeo tiene 555 frases y 6045 palabras para practicar shadowing. La parte hablada dura 34:46. El hablante habla a un ritmo natural de unas 174 palabras por minuto, cercano a una conversación cotidiana. El 86 % de las palabras está entre las 3.000 más comunes del inglés; conviene repasar el resto antes de empezar.
Vocabulario clave de este vídeo
15 palabras del vídeo que vale la pena aprender, con su pronunciación y significado:
| Palabra | Pronunciación | Significado |
|---|---|---|
| economics sustantivo | /ˌiːkəˈnɒmɪks/ | economía |
| kidney sustantivo | /ˈkɪdni/ | riñón |
| curve sustantivo | /kɚv/ | curva |
| semester sustantivo | /sɪˈmɛstɚ/ | semestre, ciclo |
| principle sustantivo | /ˈpɹɪn.sɪ.pəl/ | principio |
| diamond sustantivo | /ˈdaɪ.ə.mənd/ | diamante, gema |
| behavioral adjetivo | /bɪˈheɪvjəɹəl/ | del comportamiento, conductual |
| equilibrium sustantivo | /ɛkwɪˈlɪbɹɪəm/ | equilibrio |
| essentially adverbio | /ɪˈsɛnʃəli/ | esencialmente, en esencia |
| auction sustantivo | /ˈɔkʃən/ | subasta, remate |
| lecture sustantivo | /ˈlɛk.t͡ʃə/ | aleccionamiento, lectivo |
| optimization sustantivo | /ˌɑptəmaɪˈzeɪʃən/ | optimización |
| fraud sustantivo | /ˈfɹɔːd/ | fraude, dolo |
| equity sustantivo | /ˈɛk.wɪ.ti/ | equidad, epiqueya |
| transaction sustantivo | /tɹænˈzækʃən/ | transacción |
Phrasal verbs que vas a escuchar
| Palabra | Pronunciación | Significado |
|---|---|---|
| write down verbo | apuntar, anotar | |
| turn out verbo | resultar | |
| end up verbo | terminar, ir a parar | |
| go up verbo | subir | |
| back up verbo | retroceder, ciar | |
| bring up verbo | levantar, alzar | |
| lay out verbo | /ˌleɪ ˈaʊt/ | encaminar |
| mix up verbo | revolver |
Frases que vale la pena repetir
Frases cortas y completas del vídeo que puedes reutilizar en la conversación diaria:
- Will this cover your rationality?
- We're going to essentially, what is a model?
- Why the heck do we give roses?
- The positive question is, what happens if you do?
- The normative question is, should you?
Gramática en este vídeo
Las estructuras que más usa el hablante, con las palabras exactas del vídeo:
| Estructura | En el vídeo |
|---|---|
| Present perfect have/has + participio pasado — una acción pasada que sigue importando ahora | I've decided · we've derived · have failed |
| Voz pasiva be + participio pasado — importa lo que ocurre, no quién lo hace | be taught · is called · are called |
| Oraciones de relativo who / which + oración — información extra sobre una persona o cosa | function, which is · throughout, which is · semester, which is |
Pronunciación a tener en cuenta
El hablante usa 144 contracciones y formas reducidas, como we're, we'll, don't. Dilas en su forma corta, tal como las oyes.
- Los sonidos de “th”: mathematics /mæθ(.ə)ˈmæt.ɪks/, mathematical /ˌmæθ(.ə)ˈmæt.ɪ.kəl/, wealthy /ˈwɛl.θi/, underneath /ˌʌndɚˈniθ/
- Los sonidos de “sh” y “zh”: essentially /ɪˈsɛnʃəli/, auction /ˈɔkʃən/, optimization /ˌɑptəmaɪˈzeɪʃən/, transaction /tɹænˈzækʃən/, intuition /ˌɪn.tjuːˈɪʃ.ən/
- Palabras largas — cuida el acento: economics /ˌiːkəˈnɒmɪks/, behavioral /bɪˈheɪvjəɹəl/, equilibrium /ɛkwɪˈlɪbɹɪəm/, essentially /ɪˈsɛnʃəli/, optimization /ˌɑptəmaɪˈzeɪʃən/
Sonidos difíciles para hispanohablantes:
- s + consonante al inicio — sin añadir una “e” delante: spin /spɪn/, steady /ˈstɪdi/, slight /slaɪt/, sloping /ˈsloʊpɪŋ/, scarcity /ˈskɛɹsɪti/
- /v/ — no es /b/: los dientes tocan el labio inferior: curve /kɚv/, behavioral /bɪˈheɪvjəɹəl/, invisible /ɪnˈvɪzəb(ə)l/, intuitive /ɪnˈtjuːɪtɪv/, derive /dɪˈɹaɪv/
- /z/ — sonora, no /s/: optimization /ˌɑptəmaɪˈzeɪʃən/, transaction /tɹænˈzækʃən/, invisible /ɪnˈvɪzəb(ə)l/, resource /ɹɪˈzɔːs/, representation /ˌɹɛp.ɹə.zɛnˈteɪ.ʃən/
Cómo practicar con este vídeo
- Escucha el vídeo entero una vez sin hablar y anota las palabras que no conoces.
- Empieza a velocidad 0,75×, haz shadowing frase por frase y vuelve a la velocidad normal cuando te resulte fácil.
- Grábate y compara con el original, prestando atención a palabras como economics, kidney, curve.
¿Qué es la Técnica de Shadowing?
Shadowing es una técnica de aprendizaje de idiomas respaldada por la ciencia, desarrollada originalmente para la formación de intérpretes profesionales y popularizada por el políglota Dr. Alexander Arguelles. El método es simple pero poderoso: escuchas audio en inglés nativo y lo repites en voz alta de inmediato, como una sombra que sigue al hablante con solo 1-2 segundos de retraso. A diferencia de la escucha pasiva o los ejercicios de gramática, el shadowing obliga a tu cerebro y músculos de la boca a procesar y reproducir simultáneamente patrones de habla reales. Las investigaciones muestran que mejora significativamente la precisión de la pronunciación, la entonación, el ritmo, el habla conectada, la comprensión auditiva y la fluidez al hablar, convirtiéndola en una de las metodologías más efectivas para la preparación del IELTS Speaking y la comunicación en inglés en el mundo real.