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Topic: Marginal utility theory

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Economic rent

Henry George

	Marginalism - Wikipedia, the free encyclopedia
		The theory of marginal utility was independently developed around 1870 by William Stanley Jevons in England, Carl Menger in Austria and Leon Walras in Switzerland.
		Marginal utility, or marginal benefit, is the additional utility (satisfaction or benefit) that a consumer derives from an additional unit of a commodity or service (output).
		Whatever the neurological basis, the result of diminishing marginal utility is that rather than having a lot of one good or a lot of another one, one prefers having some of both.
	en.wikipedia.org /wiki/Marginal_utility (1824 words)

	Goodness and evil - Wikipedia, the free encyclopedia
		Welfarist theories of value are those which say that that which is good, and hence valuable, are due to their effects on the wellbeing of persons.
		It contrasts with marginal utility theory, which argues that the value of labor depends on subjective preferences by consumers, which may however also be objectively studied.
		In effect, conceptual metaphor theories treat ethics as an ontology problem and the issue of how to work-out values as a negotiation of these metaphors, not the application of some abstraction or a strict standoff between parties who have no way to understand each other's views.
	en.wikipedia.org /wiki/Goodness (5088 words)

	William Stanley Jevons - Wikipedia, the free encyclopedia
		The theory of utility was at about 1870 being independently developed on somewhat similar lines by Carl Menger in Austria and Leon Walras in Switzerland.
		While ordinal utility implies that the utility of a particular can be compared to the utility of another and ranked according to which good provided the most utility.
		Jevons' general theory of induction was a revival of the theory laid down by Whewell and criticized by John Stuart Mill; but it was put in a new form, and was free from some of the non-essential adjuncts which rendered Whewell's exposition open to attack.
	en.wikipedia.org /wiki/William_Stanley_Jevons (2050 words)

	[No title]
		In all this the marginal utility school is substantially at one with the classical economics of the nineteenth century, the difference between the two being that the former is confined within narrower limits and sticks more consistently to its teleological premises.
		Both the classical school is general and its specialized variant, the marginal utility school, in particular, take as their common point of departure the traditional psychology of the early nineteenth century hedonists, which is accepted as a matter of course or of common notoriety and is held quite uncritically.
		The postulates of marginal utility, and the hedonistic preconceptions generally, fail at this point in that they confine the attention to such bearings of economic conduct as are conceived not to be conditioned by habitual standards and ideals and to have no effect in the way of habituation.
	socserv2.socsci.mcmaster.ca /~econ/ugcm/3ll3/veblen/margutil.txt (4101 words)

	Untitled
		The purpose of marginal utility theory is to explain an individual household's demand.
		Marginal utility is the change in total utility resulting from a one-unit increase in the quantity of a good consumed.
		Marginal utility is the change in total utility per unit change in consumption.
	www.econ.iastate.edu /classes/econ101/vandewetering/chapter8notes.htm (1296 words)

	David Friedman, Price Theory: Chapter 4: Marginal Value, Marginal Utility, and Consumer Surplus
		Figure 4-2 shows your total and marginal utility for oranges as a function of the quantity of oranges you are consuming, on the assumption that it is costly to dispose of oranges.
		Since marginal value is marginal utility divided by the marginal utility of income, the ratio of the marginal values of two goods is the same as the ratio of their marginal utilities.
		Unless the marginal value of the eleventh apple is the same as that of the tenth (which it should not be, by our assumption of declining marginal utility) and the marginal value of the fourth cookie the same as that of the fifth (ditto), the argument as I gave it is wrong!
	www.daviddfriedman.com /Academic/Price_Theory/PThy_Chapter_4/PThy_Chapter_4.html (11027 words)

	UTILITY
		MARGINAL UTILITY is the change in utility due to a one unit change in the quantity of a good or service consumed.
		A UTILITY function is the rule by which this assignment is done and depends on the preferences of the individual decision maker.
		Utility theory provides a basis for the assignment of utilities to consequences by formulating necessary and sufficient conditions to satisfy (i) and (ii).
	pespmc1.vub.ac.be /ASC/UTILITY.html (597 words)

	Free-Essays.us - Microeconomics
		Marginal utility theory assumes that a household has a given income to spend and that it has no influence on the prices of goods or services it purchases.
		Marginal utility is that change in total utility resulting from a one-unit increase in the quantity of consumed goods or services.
		This decrease in marginal utility as the consumption of a good increases is the principle of diminishing marginal utility.
	www.free-essays.us /dbase/d4/lvw167.shtml (4390 words)

	Foundations of Microeconomics Chapter 10 -- eFoundations 10.2 (Site not responding. Last check: 2007-10-23)
		Explain marginal utility theory and use it to derive a consumer’s demand curve.
		Total utility is maximized when the entire budget is spent and marginal utility per dollar spent is equal for all goods.
		If the marginal utility per dollar spent on good A exceeds that on good B, total utility increases if the quantity purchased of good A increases and the quantity purchased of good B decreases.
	occawlonline.pearsoned.com /bookbind/pubbooks/bpmicro_awl/chapter10/custom2/deluxe-content.html (108 words)

	Glossary of Terms: Th (Site not responding. Last check: 2007-10-23)
		Theory is an ideal image of the material world corresponding to practice.
		Einstein emphasised the "in general" because he held that individual concepts within a theory need not be subject to the criterion of testability which he held applied only to the theory as a whole.
		The theory of marginal utility was developed independently William Stanley Jevons (England 1871), Karl Menger (Austria 1871) and Leon Walras (Switzerland, 1874) and formed the foundation for all subsequent bourgeois economic science.
	www.marxists.org /glossary/terms/t/h.htm (3642 words)

	Marginal Utility and neo-classical Economics by Istvan Mészáros (Site not responding. Last check: 2007-10-23)
		The various theories of ‘marginal utility’ – from the English and Swiss versions to the Austrian variations – were conceived to a large extent as an antidote in this respect.
		For in the neatly streamlined accounts of ‘marginal utility theory’ all such contestations must have been based on a total misunderstanding of the ‘factors of production’ as well as of their constituent parts or ‘particles’ which were predestined to define in the interest of all the nature of the established order of production and distribution.
		When it comes to the concept of utility, the ubiquitous individualistic assumptions conveniently remove the potentially most embarrassing question in relation to the real world – as opposed to the tendentiously assumed ‘economic realities’, – namely: ‘whose utility’ are we talking about.
	www.marxists.org /archive/meszaros/works/beyond-capital/ch03-2.htm (3912 words)

	Phases of the Marginalist Revolution
		The concept of "utility" handed down by the Scholastics to the modern 18th Century economics by writers such as Samuel von Pufendorf (1675) was to connect utility to desiredness and not to usefulness.
		Unlike Classical theory, Jevons argued, the value of labour "is determined by the value of the produce, not the value of the produce by that of the labour." (Jevons, 1871: p.166).
		Marginal utility, let us be frank, is hardly a scientific concept: unobservable, unmeasurable and untestable, marginal utility is a notion with very dubious scientific standing.
	cepa.newschool.edu /het/essays/margrev/phases.htm (8561 words)

	NCPA - Economic Issues - Loss Aversion Explains Risk Aversion (Site not responding. Last check: 2007-10-23)
		One of the primary theories is the diminishing marginal utility of wealth -- that is, individuals value an extra dollar less the richer they become.
		Marginal utility theory seemed to explain this by implying that the utility of the second hundred dollars is less than the first.
		Rabin says it becomes apparent that this theory is wrong when it is applied to larger wagers, where it implies the marginal utility of money diminishes at an absurd rate.
	www.ncpa.org /pd/economy/pd022201f.html (346 words)

	Catholicism, Protestantism, and Capitalism by Murray N. Rothbard
		Kauder maintains, first, that utility theory was developed to a high degree by, first Aristotle, and then, the scholastics, particularly the neglected late Spanish scholastics of the late 16
		Perhaps this is why Marshall resisted utility theory, and insisted on retaining much of Ricardian cost-theory, which even yet persists as a result.
		He also treats their adoption of the market price as essentially the just price, utility theory, subjective value, etc. He says that while Aristotle and Scotus believed the normal competitive price was the just one, the later Spanish scholastics identified the market price with any competitive price, e.
	www.lewrockwell.com /rothbard/rothbard56.html (1824 words)

	Dolan, The Foundations of Modern Austrian Economics, Rothbard, The Austrian Theory of Money: Library of Economics and ...
		Mises's fundamental accomplishment was to take the theory of marginal utility, built up by Austrian economists and other marginalists as the explanation for consumer demand and market price, and apply it to the demand for and the value, or the price, of money.
		In the course of his analysis Mises built on the insight of his fellow Austrian Franz Cuhel to develop a marginal utility that was strictly ordinal, lexicographic, and purged of all traces of the error of assuming the measurability of utilities.
		When he set out to apply the theory of marginal utility to the price of money, Mises confronted the problem that was later to be called "the Austrian circle." In short, when someone ranks eggs or beef or shoes on his value scale, he values these goods for their direct use in consumption.
	www.econlib.org /library/NPDBooks/Dolan/dlnFMA12.html (7392 words)

	People (4) in "Human Action" - David Bryant's Pages
		His Theory of Political Economy, published in 1871, advanced the law of decreasing marginal utility as part of a new theory of value.
		His major contribution to economic thought concerns the subjective theory of value and explains how the forces of competition combine with marginal utility and acts of individual choice to distribute the available means of production into the various product lines in which they can most profitably be employed.
		His contributions to mathematics were many and varied, ranging from the theory of automorphic functions to the classical "3-body problem" of Newtonian mechanics to the topology of relativistic space and time and even to the theory of numbers (quadratic forms).
	home.att.net /~davidbryant/hanames04.htm (2051 words)

	More on the Calculus of Hedonism (Site not responding. Last check: 2007-10-23)
		Writing of “The Limitations of Marginal Utility” in 1909, Thorstein Veblen conceded that the premises of marginal utility theory “commend themselves to all serious and uncritical persons at first glance”, since it is evident that human behaviour is purposeful, and marginal utility theory appears to provide an explanation for purposeful behaviour.
		But economic theory treats demand as an entity which can either actually be at rest, or which can be justifiably treated as constant even though, in reality, it is continually changing.
		Marginal utility theory argues that the ultimate objective of all actors on the market economy stage, from the poorest to the richest, is consumption.
	www.debunking-economics.com /Hedonism/More/index.htm (4364 words)

	Self Test Chapter 8
		True False The principle of diminishing marginal utility states that as the consumption of a good increases its marginal utility decreases.
		Marginal utility theory requires that the last dollar spent on a good by a person would reap more marginal utility than the last dollar spent on any other good.
		False Menger analyzed the idea of utility and realized that total utility is really what determines price, and only the items with high utility should have high prices.
	www.mines.edu /academic/courses/econbus/dahl/401/st08/st08.htm (646 words)

	[No title]
		Also see: HYPERLINK "http://www.economyprofessor.com/economictheories/aggregate-demand-theory.html"aggregate demand theory, HYPERLINK "http://www.economyprofessor.com/economictheories/theory-of-consumer-demand.html"consumer demand theory, Slutsky's theorem theory of consumer demand (20th century) Theory of consumer demand is the analysis of demand with regard to consumer behavior and rationale when changes occur in variable factors such as price, income, substitute goods.
		Also see: axiomatic theories h century-) First examined by French engineer and economist HYPERLINK "http://www.economyprofessor.com/theorists/julesdupuit.html"Jules Dupuit (1804-1866) and later developed by 20th century economists, cost benefit analysis is the determination of the total value of a proposed investment's inputs and outputs.
		Marginal productivity theory of distribution deals principally with demand for factors of production and disregards the supply side.
	www.nusd.k12.az.us /schools/nhs/gthomson.class/econ/EconomicsTheories.doc (782 words)

	Jevons
		Menger and Jevons made an error that might be described as the mirror of the error in classical economics.
		Discuss: classical value theory explains what determines prices in the long run, whereas marginal utility theory explains prices in the short run.
		Marginal utility theory is an example of a broader principle of going to the margin in order to understand economic activity.
	www.uwlax.edu /faculty/giddings/2002-2003/ECO306/jevons.htm (448 words)

	Tutor2u Discussion Forum - marginal utility theory
		explain why marginal utility theory is not a realistic piece of economic analysis in explaining consumer demand.
		my answer is that marginal utility cannot be objectively and easily measured, and that consumers are not so rational in practice, as they may be led by impulse or advertising.
		with regards to your reservations about the 'measurability' of utiltiy; a concept need not necessarily be accounted in order for it to play a vital role in economic theory - it being the imprecise science that it is, is expanded somewhat through simple thought experiments.
	www.tutor2u.net /forum/topic.asp?TOPIC_ID=14833 (175 words)

	Chapter 11 - Landreth and Colander
		False Walras came up with the theory of optimum distribution of scarce resource allocation in which it is possible to make someone better off without negatively effecting someone else.
		False Walras is known as one of the fathers of neoclassical economics.
		False Walras was able to simplify the general equilibrium theory by expressing it in mathematical notation.
	www.mines.edu /academic/courses/econbus/dahl/401/st11/st11.htm (517 words)

	EURODOS - Marxism and Mathematical Economics (Site not responding. Last check: 2007-10-23)
		Marxists have usually rejected this whole theory and all concepts and mathematical arguments introduced in connection with it, as if acceptance of it, or elements of it, would necessarily imply a rejection of the labor theory of value.
		Thus neither marginal utility and related concepts, nor the mathematics applied to define these concepts, can logically serve to refute the labor theory of value as long as one holds to the assumptions about the production structure contained in the Marxian theory.
		Nevertheless, Marxists often seem to refrain in general from using so-called "marginal reasoning" or "marginal concepts." Now, "marginal reasoning" is bound to occur with logical necessity whenever there is a question of maximizing or minimizing something, and this occurs in many connections in the analysis of economic problems.
	www.xs4all.nl /~eurodos/docu/econ/johansen-1963.html (551 words)

	Book Review: Principles of Economics by Carl Menger \| The Foundation for Economic Education: The Freeman, Ideas on ...
		Menger is perhaps best known for his development of marginal utility theory, discovered almost simultaneously by Jevons and Walras.
		It was Menger who elaborated the logical foundations of marginal utility theory and it was his Principles specifically that served as the basic textbook for the Austrian economists (Bohm-Bawerk, Mises, and Hayek in particular) who followed him.
		Although Menger is acclaimed primarily for his role in developing what is now known as “marginal utility” theory, his writings on methodological individualism, subjective value, and the economic character of goods (Menger’s Law) deserve more attention.
	fee.org /publications/the-freeman/article.asp?aid=591 (702 words)

	Austrian Treatment of Davenport's Loan Fund Theory
		So it is little wonder that his loan fund theory of capital has gone unrecognized in mainstream economics.
		O'Driscoll presumably does not mean marginal utility theory, however, but the subjective theory of value, since Davenport was a critic of marginal utility theory as such.
		It is difficult to understand Salerno's purpose for writing the second part of this remark, since Davenport explained the trade cycle by referring to the desire, on account of time preference, for individuals to hold money for speculation and precaution, instead of for transactions.
	www.constitution.org /pd/gunning/subjecti/workpape/davauslf.htm (1027 words)

	Background - William Stanley Jevons (Site not responding. Last check: 2007-10-23)
		William Stanley Jevons (September 1, 1835 - August 13, 1882), England economist and logician, was born in Liverpool.
		Jevons work, along with similar discoveries made by Carl Menger in Vienna (1871) and by Leon Walras in Switzerland (1874), marked the opening of a new period in the history of economic thought.
		The most important of his works on logic and scientific methods is his Principles of Science (1874), as well as The Theory of Political Economy (1871) and The State in Relation to Labour (1882).
	mywebpage.netscape.com /Abell9583/william-stanley-jevons-background.html (801 words)

	[No title]
		‘Degree of utility’ was a function solely of the quantity of the commodity possessed by the personDegree of Utility = f(Q)’Final degree of Utility’ is “the degree of utility of the last addition, or the next possible addition of a very small, or an infinitely small quantity of the existing stock” 6.
		The ‘final degree of utility’diminished with quantity”The final degree of utility is the function upon which the theory of economics will be found to turn””We may state as a general law, that the degree of utility varies with the quantity of commodity and ultimately decreases as that quantity increases” 8.
		There is no explanation of how a trading body aggregates the final utility of different individuals except to suggest an average tendency.=> violation of his dictum of no interpersonal comparison 2.
	www.chass.utoronto.ca /~econra/faculty/Furlong/429/JEVONS2.doc (604 words)

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