Microeconomics and Macroeconomics Tutorials with Sal Khan

Video Lectures

Displaying all 131 video lectures.
Lecture 1
Production possibilities frontier
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Production possibilities frontier
Tradeoffs for a hunter gatherer and the production possibilities frontier, and the notion of "ceteris paribus" (which means "everything else held equal").

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Lecture 2
Opportunity Cost
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Opportunity Cost
Opportunity cost (and marginal cost) based on the PPF
More free lessons at: http://www.khanacademy.org/video?v=pkEiHZAtoro
Lecture 3
Increasing opportunity cost
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Increasing opportunity cost
Why the opportunity cost may increase as you pursue more rabbits

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Lecture 4
Allocative efficiency and marginal benefit
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Allocative efficiency and marginal benefit
Marginal Utility and maximization

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Lecture 5
Economic growth through investment
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Economic growth through investment
How investing for capital formation can expand the production possibilities frontier (PPF)

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Lecture 6
Comparative advantage specialization and gains from trade
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Comparative advantage specialization and gains from trade
How two parties can get better outcomes by specializing in their comparative advantage and trading

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Lecture 7
Comparative advantage and absolute advantage
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Comparative advantage and absolute advantage
Showing that a party benefits from trade as long as there is a comparative advantage (and not necessarily an absolute advantage)

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Lecture 8
Law of demand | Supply, demand, and market equilibrium
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Law of demand | Supply, demand, and market equilibrium
Example of the law of demand

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Lecture 9
Price of related products and demand
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Price of related products and demand
How changes in the price of related goods can shift demand

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Lecture 10
Changes in income, population, or preferences
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Changes in income, population, or preferences
How demand can be affected by changes in income, population or preferences

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Lecture 11
Normal and inferior goods | Supply, demand, and market equilibrium
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Normal and inferior goods | Supply, demand, and market equilibrium
How the demand for some goods could actually go down if incomes go up

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Lecture 12
Inferior goods clarificationx
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Inferior goods clarificationx
More clarification on inferior and normal goods

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Lecture 13
Law of supply | Supply, demand, and market equilibrium
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Law of supply | Supply, demand, and market equilibrium
Introduction to the Law of Supply

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Lecture 14
Factors affecting supply | Supply, demand, and market equilibrium
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Factors affecting supply | Supply, demand, and market equilibrium
How the price of inputs, price of related goods, number of suppliers technology, and expected future prices affects the supply curve

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Lecture 15
Market equilibrium | Supply, demand, and market equilibrium
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Market equilibrium | Supply, demand, and market equilibrium
Equilibrium price and quantity for supply and demand

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Lecture 16
Changes in Market Equilibrium
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Changes in Market Equilibrium
How the equilibrium price or quantity might change due to changes in supply or demand
More free lessons at: http://www.khanacademy.org/video?v=NgPqyM3I_8o
Lecture 17
Price elasticity of demand | Elasticity
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Price elasticity of demand | Elasticity
Introduction to price elasticity of demand

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Lecture 18
More on elasticity of demand | Elasticity
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More on elasticity of demand | Elasticity
Introduction to price elasticity of demand

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Lecture 19
Perfect inelasticity and perfect elasticity of demand
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Perfect inelasticity and perfect elasticity of demand
Extreme examples of price elasticity of demand

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Lecture 20
Constant unit elasticity | Elasticity
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Constant unit elasticity | Elasticity
What a demand curve with constant unit elasticity would look like

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Lecture 21
Total revenue and elasticity | Elasticity
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Total revenue and elasticity | Elasticity
Thinking about how total revenue and elasticity are related

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Lecture 22
More on total revenue and elasticity | Elasticity
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More on total revenue and elasticity | Elasticity
Clarification on the relationship between total revenue and elasticity

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Lecture 23
Cross elasticity of demand | Elasticity
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Cross elasticity of demand | Elasticity
Price of one good impacting quantity demanded of another

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Lecture 24
Elasticity of supply | Elasticity
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Elasticity of supply | Elasticity
Thinking about elasticity of supply

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Lecture 25
Elasticity and strange percent changes | Elasticity
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Elasticity and strange percent changes | Elasticity
Why we calculate percent changes in a strange way when calculating elasticities

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Lecture 26
Demand Curve as Marginal Benefit Curve
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Demand Curve as Marginal Benefit Curve
Thinking about a demand curve in terms of quantity driving price
More free lessons at: http://www.khanacademy.org/video?v=KrkbbRxdDZ8
Lecture 27
Consumer surplus introduction | Consumer and producer surplus
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Consumer surplus introduction | Consumer and producer surplus
Consumer surplus as difference between marginal benefit and price paid

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Lecture 28
Total consumer surplus as area
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Total consumer surplus as area
Looking at consumer surplus as area between the demand curve and the market price

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Lecture 29
Producer surplus | Consumer and producer surplus
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Producer surplus | Consumer and producer surplus
Looking at the supply curve as an opportunity cost curve. Understanding the producer surplus as the area between the supply curve and the market price

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Lecture 30
Rent Control and Deadweight Loss
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Rent Control and Deadweight Loss
How instituting a price ceiling lower than the equilibrium price reduces the total surplus (dead weight loss)
Lecture 31
Minimum wage and price floors
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Minimum wage and price floors
How a minimum wage might effect the labor market

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Lecture 32
Taxation and dead weight loss
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Taxation and dead weight loss
The effect of taxation on the equilibrium price and quantity

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Lecture 33
Percentage tax on hamburgers
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Percentage tax on hamburgers
What would happen if we have a percentage tax instead of a fixed dollar amount

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Lecture 34
Taxes and perfectly inelastic demand
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Taxes and perfectly inelastic demand
Who bears the burden for the taxes when demand is inelastic

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Lecture 35
Taxes and perfectly elastic demand
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Taxes and perfectly elastic demand
Who bears the burden for a tax on a good with perfectly elastic demand

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Lecture 36
Marginal Utility
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Marginal Utility
Marginal utility and marginal benefit. How you would spend $5 on chocolate and fruit
More free lessons at: http://www.khanacademy.org/video?v=Kf9KhwryQNE
Lecture 37
Equalizing Marginal Utility per Dollar Spent
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Equalizing Marginal Utility per Dollar Spent
Why the marginal utility for dollar spent should be theoritically equal for the last increment of either good purchased
More free lessons at: http://www.khanacademy.org/video?v=KbW6OiuRa1Y
Lecture 38
Deriving demand curve from tweaking marginal utility per dollar
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Deriving demand curve from tweaking marginal utility per dollar
Seeing what happens to quantity demanded when price changes

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Lecture 39
Budget Line
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Budget Line
What I can buy with my income
More free lessons at: http://www.khanacademy.org/video?v=Uq5Wzs96tiw
Lecture 40
Optimal point on budget line
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Optimal point on budget line
Using indifference curves to think about the point on the budget line that maximizes total utility

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Lecture 41
Types of indifference curves
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Types of indifference curves
Indifference curves for normal goods, substitutes and perfect complements

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Lecture 42
Economic profit vs accounting profit
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Economic profit vs accounting profit
Difference between a firm's accounting and economic profit

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Lecture 43
Depreciation and opportunity cost of capital
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Depreciation and opportunity cost of capital
How to account for things when you own the building instead of renting it

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Lecture 44
Fixed, Variable, and Marginal Cost.
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Fixed, Variable, and Marginal Cost.
Thinking about average fixed, variable and marginal cost
More free lessons at: http://www.khanacademy.org/video?v=bBQVaRnHqLs
Lecture 45
Visualizing average costs and marginal costs as slope
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Visualizing average costs and marginal costs as slope
Graphing variable cost, fixed cost and total cost

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Lecture 46
Marginal cost and average total cost
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Marginal cost and average total cost
Looking at marginal and average total cost in the context of a juice business

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Lecture 47
Marginal revenue and marginal cost
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Marginal revenue and marginal cost
Thinking about a rational quantity of juice to produce

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Lecture 48
Marginal revenue below average total cost
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Marginal revenue below average total cost
Why it is rational to produce at a loss

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Lecture 49
Long term supply curve and economic profit
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Long term supply curve and economic profit
Understanding the long term supply curve in terms of economic profit

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Lecture 50
Perfect competition | Forms of competition
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Perfect competition | Forms of competition
Conditions for perfect competition. Looking at the airline industry

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Lecture 51
Monopoly basics | Forms of competition
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Monopoly basics | Forms of competition
Thinking about what would happen with one airline. The opposite of perfect competition

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Lecture 52
Monopolist optimizing price: Total revenue.
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Monopolist optimizing price: Total revenue.
Starting to think about how a monopolist would rationally optimize profits

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Lecture 53
Monopolist optimizing price: Marginal revenue
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Monopolist optimizing price: Marginal revenue
Plotting the marginal revenue curve for a monopolist

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Lecture 54
Monopolist optimizing price: Dead weight loss
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Monopolist optimizing price: Dead weight loss
Showing that what is optimal for the monopolist is not optimal for society

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Lecture 55
Optional calculus proof to show that MR has twice slope of demand
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Optional calculus proof to show that MR has twice slope of demand
Showing that what is optimal for the monopolist is not optimal for society

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Lecture 56
Review of Revenue and Cost Graphs for a Monopoly
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Review of Revenue and Cost Graphs for a Monopoly
Review of marginal revenue (MR), total revenue (TR), marginal cost (MC) and average total cost (ATC) for a monopoly
Lecture 57
Oligopolies and monopolistic competition | Forms of competition
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Oligopolies and monopolistic competition | Forms of competition
Thinking about different markets that are in-between monopolies and perfect competition

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Lecture 58
Monopolistic competition and economic profit
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Monopolistic competition and economic profit
Why it is hard for a monopolisitc competitor to make economic profit in the long run

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Lecture 59
Oligopolies, duopolies, collusion, and cartels
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Oligopolies, duopolies, collusion, and cartels
Thinking about when oligopolies behave more like monopolies or perfect competitors

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Lecture 60
Prisoners' dilemma and Nash equilibrium
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Prisoners' dilemma and Nash equilibrium
Why two not-so-loyal criminals would want to snitch each other out

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Lecture 61
More on Nash equilibrium | Game theory and Nash equilibrium
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More on Nash equilibrium | Game theory and Nash equilibrium
Looking more closely at the definition of Nash Equilibrium

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Lecture 62
Why parties to cartels cheat | Game theory and Nash equilibrium
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Why parties to cartels cheat | Game theory and Nash equilibrium
Why duopolists would benefit to form a cartel and why it makes sense for them to cheat

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Lecture 63
Game theory of cheating firms | Game theory and Nash equilibrium
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Game theory of cheating firms | Game theory and Nash equilibrium
Pareto Optimality and more on Nash Equilibrium. Seeing how cheating duopolists parallels the prisoners dilemma

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Lecture 64
Negative externalities | Consumer and producer surplus
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Negative externalities | Consumer and producer surplus
Taking negative externalities into account when thinking about the optimal equilibrium price and quantity

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Lecture 65
Taxes for factoring in negative externalities
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Taxes for factoring in negative externalities
How to factor in negative externalities through taxation

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Lecture 66
Positive externalities | Consumer and producer surplus
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Positive externalities | Consumer and producer surplus
Factoring in external benefits

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Lecture 67
Tragedy of the commons | Consumer and producer surplus
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Tragedy of the commons | Consumer and producer surplus
How public resources can be abused

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Lecture 68
First degree price discrimination
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First degree price discrimination
Charging different consumers different amounts in an attempt to optimize economic profit

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Lecture 69
A firm's marginal product revenue curve
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A firm's marginal product revenue curve
Thinking about how much incremental benefit a firm gets from hiring one more person

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Lecture 70
How many people to hire given the MPR curve
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How many people to hire given the MPR curve
Thinking about how many people it makes sense to hire. Brief discussion of a monopsony.

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Lecture 71
Adding demand curves | Production decisions and economic profit
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Adding demand curves | Production decisions and economic profit
How to add demand curves

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Lecture 72
Circular flow of income and expenditures
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Circular flow of income and expenditures
Basic introduction to what microeconomics and macroeconomics study. A bit on Adam Smith.

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Lecture 73
Parsing gross domestic product | GDP: Measuring national income
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Parsing gross domestic product | GDP: Measuring national income
Understanding what GDP does and doesn't measure.

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Macroeconomics on Khan Academy: Topics covered in a traditional college level introductory macroeconomics course





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Lecture 74
More on final and intermediate GDP contributions
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More on final and intermediate GDP contributions
What happens when a good is not finished in a period

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Macroeconomics on Khan Academy: Topics covered in a traditional college level introductory macroeconomics course





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Lecture 75
Investment and consumption | GDP: Measuring national income
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Investment and consumption | GDP: Measuring national income
Difference between every day and economic notions of investment and consumption

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Macroeconomics on Khan Academy: Topics covered in a traditional college level introductory macroeconomics course





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Lecture 76
Income and expenditure views of GDP | GDP: Measuring national income
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Income and expenditure views of GDP | GDP: Measuring national income
Looking at a simple model of an economy

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Macroeconomics on Khan Academy: Topics covered in a traditional college level introductory macroeconomics course





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Lecture 77
Components of GDP | GDP: Measuring national income
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Components of GDP | GDP: Measuring national income
Thinking about how different types of expenditures would be accounted for in GDP

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Lecture 78
Examples of accounting for GDP | GDP: Measuring national income
Play Video
Examples of accounting for GDP | GDP: Measuring national income
Thinking about how different types of expenditures would be accounted for in GDP

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Lecture 79
Real GDP and nominal GDP | GDP: Measuring national income
Play Video
Real GDP and nominal GDP | GDP: Measuring national income
Using real GDP as a measure of actual productivity growth

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Lecture 80
GDP deflator | GDP: Measuring national income
Play Video
GDP deflator | GDP: Measuring national income
Relationship between the GDP deflator, nominal GDP and real GDP

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Lecture 81
Example Calculating Real GDP with a Deflator
Play Video
Example Calculating Real GDP with a Deflator
Simple example of calculating Real GDP from Nominal GDP
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Lecture 82
Introduction to inflation | Inflation - measuring the cost of living
Play Video
Introduction to inflation | Inflation - measuring the cost of living
Basics of price inflation and the CPI (consumer price index)

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Lecture 83
Actual CPI-U Basket of Goods
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Actual CPI-U Basket of Goods
Exploring the actual weightings for the CPI-U basket of goods
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Lecture 84
Phillips curve | Inflation - measuring the cost of living
Play Video
Phillips curve | Inflation - measuring the cost of living
The observation that inflation and unemployment tend to be inversely correlated

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Lecture 85
Interest as rent for money | The monetary system
Play Video
Interest as rent for money | The monetary system
Thinking about interest as the price of money. Looking at money from a supply and demand perspective

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Lecture 86
Money supply and demand impacting interest rates
Play Video
Money supply and demand impacting interest rates
Examples showing how various factors can affect interest rates

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Lecture 87
The business cycle | Aggregate demand and aggregate supply
Play Video
The business cycle | Aggregate demand and aggregate supply
The business cycle and how it may be driven by emotion

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Lecture 88
Aggregate demand | Aggregate demand and aggregate supply
Play Video
Aggregate demand | Aggregate demand and aggregate supply
Understanding how aggregate demand is different from demand for a specific good or service. Justifications for the aggregate demand curve being downward sloping

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Lecture 89
Shifts in aggregate demand | Aggregate demand and aggregate supply
Play Video
Shifts in aggregate demand | Aggregate demand and aggregate supply
Factors that might shift aggregate demand

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Lecture 90
Long-run aggregate supply | Aggregate demand and aggregate supply
Play Video
Long-run aggregate supply | Aggregate demand and aggregate supply
Thinking about why aggregate supply may not be influenced by prices in the long-run

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Lecture 91
Short run aggregate supply | Aggregate demand and aggregate supply
Play Video
Short run aggregate supply | Aggregate demand and aggregate supply
Justifications for the aggregate supply curve to be upward sloping in the short-run

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Lecture 92
Demand-pull inflation under Johnson
Play Video
Demand-pull inflation under Johnson
Thinking about whether inflation in the late 1960s is consistent with the AD-AS model

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Lecture 93
Real GDP driving price | Aggregate demand and aggregate supply
Play Video
Real GDP driving price | Aggregate demand and aggregate supply
Thinking about how high utilization could drive price as another justification for an upward sloping short-run aggregate supply curve

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Lecture 94
Cost-push inflation | Aggregate demand and aggregate supply
Play Video
Cost-push inflation | Aggregate demand and aggregate supply
How an oil shock can slow the economy while causing inflation

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Lecture 95
Monetary and fiscal policy | Aggregate demand and aggregate supply
Play Video
Monetary and fiscal policy | Aggregate demand and aggregate supply
Basic mechanics of monetary and fiscal policy

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Lecture 96
Tax lever of fiscal policy | Aggregate demand and aggregate supply
Play Video
Tax lever of fiscal policy | Aggregate demand and aggregate supply
How government can effect aggregate demand through tax policy

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Lecture 97
Breakdown of gas prices | Supply, demand, and market equilibrium
Play Video
Breakdown of gas prices | Supply, demand, and market equilibrium
Where the dollars at the pump go

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Lecture 98
Short-run oil prices | Supply, demand, and market equilibrium
Play Video
Short-run oil prices | Supply, demand, and market equilibrium
Thinking about what moves oil prices

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Lecture 99
Keynesian economics | Aggregate demand and aggregate supply
Play Video
Keynesian economics | Aggregate demand and aggregate supply
Contrasting Keynesian and Classical Thinking

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Lecture 100
Risks of Keynesian thinking | Aggregate demand and aggregate supply
Play Video
Risks of Keynesian thinking | Aggregate demand and aggregate supply
Why Keynesian thinking might not be ideal sometimes

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Lecture 101
Overview of fractional reserve banking | The monetary system
Play Video
Overview of fractional reserve banking | The monetary system
Big picture of how money enters circulation and how lending can increase the money supply

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Lecture 102
Weaknesses of fractional reserve lending | The monetary system
Play Video
Weaknesses of fractional reserve lending | The monetary system
Weaknesses of Fractional Reserve Lending

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Lecture 103
Full reserve banking | The monetary system
Play Video
Full reserve banking | The monetary system
Overview of full reserve banking in comparison to fractional reserve banking

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Lecture 104
Money supply: M0, M1, and M2 | The monetary system
Play Video
Money supply: M0, M1, and M2 | The monetary system
Different ways of measuring the money supply

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Lecture 105
Simple fractional reserve accounting (part 2) | The monetary system
Play Video
Simple fractional reserve accounting (part 2) | The monetary system
How banks can actually create checking accounts under a fractional reserve system

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Lecture 106
MPC and multiplier
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MPC and multiplier
Introduction to the marginal propensity to consume and the multiplier

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Lecture 107
Mathy version of MPC and multiplier (optional)
Play Video
Mathy version of MPC and multiplier (optional)
Generalizing what we did in the last video with more math

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Lecture 108
Consumption function basics
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Consumption function basics
The basic idea of a consumption function

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Lecture 109
Generalized linear consumption function
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Generalized linear consumption function
Generalizing a linear consumption function as a function of aggregate income

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Lecture 110
Consumption function with income dependent taxes
Play Video
Consumption function with income dependent taxes
Thinking about a consumption function where taxes are also a function of income (which is more realistic than constant taxes)

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Lecture 111
Keynesian Cross
Play Video
Keynesian Cross
Analyzing planned expenditures versus actual output using the Keynesian Cross
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Lecture 112
Details on shifting aggregate planned expenditures
Play Video
Details on shifting aggregate planned expenditures
Showing how a change in government spending can lead to a new equilibrium

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Lecture 113
Keynesian cross and the multiplier
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Keynesian cross and the multiplier
More on shifting aggregate planned expenditures. Connecting to the multiplier

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Lecture 114
Investment and real interest rates
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Investment and real interest rates
Intuition as to why high real interest rates lead to low investment and why low rates lead to high investment

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Lecture 115
Connecting the keynesian cross to the IS curve
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Connecting the keynesian cross to the IS curve
Introduction to the Investment/Savings curve

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Lecture 116
Loanable funds interpretation of IS curve
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Loanable funds interpretation of IS curve
Thinking about how real GDP can drive real interest rates

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Lecture 117
Polyalphabetic Cipher
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Polyalphabetic Cipher
Creating a lighter fingerprint with a more intricate word-based cipher
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Lecture 118
LM part of the IS-LM model
Play Video
LM part of the IS-LM model
How the theory of liquidity preference drives demand for money and the LM (liquidity preference-money supply) curve

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Lecture 119
Government spending and the IS-LM model
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Government spending and the IS-LM model
How a change in fiscal policy shifts the IS curve

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Lecture 120
Balance of payments: Current account | Foreign exchange and trade
Play Video
Balance of payments: Current account | Foreign exchange and trade
Understanding the United States Current Account in 2011

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Lecture 121
Balance of payments: Capital account | Foreign exchange and trade
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Balance of payments: Capital account | Foreign exchange and trade
Understanding how changes in foreign ownership of assets effects balance of payments

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Lecture 122
Why Current and Capital Accounts Net Out
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Why Current and Capital Accounts Net Out
Intuition behind why the current account and capital account should balance
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Lecture 123
Accumulating foreign currency reserves | Foreign exchange and trade
Play Video
Accumulating foreign currency reserves | Foreign exchange and trade
How and why a central bank would build foreign currency reserves

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Lecture 124
Using reserves to stabilize currency | Foreign exchange and trade
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Using reserves to stabilize currency | Foreign exchange and trade
How a central bank could use foreign currency reserves to keep its own currency from devaluing

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Lecture 125
Financial crisis in Thailand caused by speculative attack
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Financial crisis in Thailand caused by speculative attack
How a currency crisis in Thailand led to a banking crisis in the 1990s

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Lecture 126
Math mechanics of Thai banking crisis | Foreign exchange and trade
Play Video
Math mechanics of Thai banking crisis | Foreign exchange and trade
Going through the mechanics of how a Thai financial institution can lose their shirt when their currency devalues.
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Lecture 127
Greek Debt Recession and Austerity (part 1)
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Greek Debt Recession and Austerity (part 1)
A primer of why Greece is in a tough situation (more in future videos)
More free lessons at: http://www.khanacademy.org/video?v=9p10aMu1Glo
Lecture 128
Greek Financial Crisis (part 2)
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Greek Financial Crisis (part 2)
What Greece could have done if it had it's own currency
More free lessons at: http://www.khanacademy.org/video?v=CkNArgNPI2Y
Lecture 129
How and why Greece would leave the Euro (part 3)
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How and why Greece would leave the Euro (part 3)
The pain and mechanics of leaving the Euro
More free lessons at: http://www.khanacademy.org/video?v=jkmwAJMERrY
Lecture 130
Why Europe is worried about Greece
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Why Europe is worried about Greece
Why the Greek situation is scary for Europe as a whole
More free lessons at: http://www.khanacademy.org/video?v=xc-TSAQkqJ0
Lecture 131
Three pointer vs free throwing probability | Probability and Statistics
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Three pointer vs free throwing probability | Probability and Statistics
Our friend and Cleveland Cavalier, LeBron James, asks Sal if there's a high probability of making three free throws in a row or one three-pointer. Before solving the problem, jot down what you think the answer will be!

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Probability and statistics on Khan Academy: We dare you to go through a day in which you never consider or use probability. Did you check the weather forecast? Busted! Did you decide to go through the drive through lane vs walk in? Busted again! We are constantly creating hypotheses, making predictions, testing, and analyzing. Our lives are full of probabilities! Statistics is related to probability because much of the data we use when determining probable outcomes comes from our understanding of statistics. In these tutorials, we will cover a range of topics, some which include: independent events, dependent probability, combinatorics, hypothesis testing, descriptive statistics, random variables, probability distributions, regression, and inferential statistics. So buckle up and hop on for a wild ride. We bet you're going to be challenged AND love it!





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