The theory of marginal utility

The theory of marginal utility marginalist theory, subjective-idealistic - all these names are one and the same economic concept.

For your information. The term "margin" - of French origin, was difficult to translate the Russian language. Approved the transfer of the word "limit" requires some explanation. The term comes from the French word "margin", meaning "field of the manuscript of the book," "extra space", "roadside". Hence the concept of "marginal utility", meaning "utility that can still be obtained," or, more clearly, even when the truck while on the road, but on its side, its a further step in this direction will lead to the collapse (limit).

This word is easily translated into other European languages. In Russian as we should speak of a "reasonable" or "reasonable" utility. But of these words is difficult to get a scientific term, and as a result, Russian economic literature has established the term "marginal utility."

The essence of the concept of community is the assertion that the price of the goods - the result will not work, and individual evaluations of customers and supply and demand. In connection with this, the marginal utility theorists disappears, the term "goods", which is replaced by the term "good." Value are only those benefits, the amount of which is insufficient to meet the need for them. Hence another name for this theory - "quantitative".

Needs are not limited in number and have a different intensity. The amount of the benefits, however, are limited. This implies that the economic, in accordance with the theory of marginal utility, called the good that can meet any need and the amount of which is limited in comparison with the need. Thus, the air is not an economic boon, though it is essential for life to everyone. Its quantity is unlimited. Based on this approach, the marginal utility theorists have explained the paradox of Adam Smith: Water is necessary for all, but it does not cost anything; diamond as useless, but he valued dearly.

Thus, the value of a good is determined by its quantity. In practice, the value of a good is determined by the last of the available parts (units), the usefulness of this last part, it is, the last part, determines the price of goods.

Needs of the individual with varying degrees of intensity. Although the assessment of tension and subjective, you can select the first need, then set the scale or gradation needs to be different in different individuals. However, it is possible to identify common features. These similarities can be studied statistics and serve as a resource for the analysis of market needs.

Observations show that the intensity decreases as the need to meet the needs of up to its complete disappearance. As a result, the usefulness and benefits, its price should also decrease as a function of quantity.

It follows from this conclusion: the utility of the good in the economic sense is not the abstract of his ability to meet the need. If it were otherwise, the diamond, employee satisfaction secondary needs to be less useful and cheaper than coal, which serves many needs. This case has already been considered "paradox of Adam Smith," which is explained in terms of the theory of marginal utility.

The scale of the needs in the benefits and the price determined by the concept of diminishing utility. The transition from the intense demand for its full satisfaction is gradual, ie a decreasing number of degrees of tension. If you split the benefit of the appropriate number of parts and consider each part on its own, in isolation, it is clear that the first part is the satisfaction of the first, the most intense degree requirements, the second - the second, less stressful and less security needs, etc. . With the decrease in the degree of strain in meeting the needs of the utility and price of each subsequent unit become smaller compared to the previous one. This is the principle of diminishing utility.

The last, or final, the utility has a utility of the last of the cash benefit. Consequently, the smaller the amount of that benefit in comparison with the need, the higher the utility and price of the last part of it and the higher the value of the total amount of the good, and vice versa.

Theorists of marginal utility moved the subject of research in the sphere of circulation, where the price from the beginning to the end is a product of subjective definitions of good value. This approach meant ignoring the social nature of economic processes and especially the role of social production. Even in cases where the representatives of the Viennese school of marginal utility had to recognize the role of production costs, they drove them to the physical experience.

In the role of a direct source of production costs often advocated the so-called burden of parting with a particular boon, which depended on its usefulness. The usefulness of this theory - the catch-all category, using which we can determine not only the demand and supply of goods, and even work. Last characterized as a rejection of the usefulness of such benefits as vacation, or as a "negative utility" of human effort.

The followers of the theory of marginal utility in the scientific revolution introduced the concept of "opportunity cost" is widespread in modern Western textbooks.

Opportunity cost - the cost, measured in terms of lost opportunity of watching the best available alternative activities that require the same time or the same resources.

E. Dolan cites the example of the car and education, where the opportunity cost of a college education is compared with the number of cars that could be produced by the same quantity of labor.

But more typical is not a choice between two good things, and among them many. In this case, having more of one good means giving up small amounts of each of the other goods.

In a system with many benefits of alternative cost can be expressed in a common unit of measurement - money. There are opportunity costs that are not related to the waste of money. For example, if you go to work, not to study, it turns income, which is the opportunity cost, even though it lost money is not being spent.

Close to the understanding of the definition of the opportunity cost of surplus value theorists of marginal utility. According to Böhm-Bawerk, surplus value - the difference in subjective assessments of present and future goods.

Theorists of marginal utility could not avoid the question of what constitutes a good value, as it is defined. Solving it, they developed a theory of imputation. According to this theory, each of the three factors of production - labor, land and capital - "charged" a certain portion of the value of the proposed benefit.

After the First World War, as the followers of the theory of marginal utility of the representatives of the new Austrian school (D Meyer, L. Schoenfeld, P. Rosenstein-Rodan, etc.), who held more extreme views. Thus, the representatives of this school were trying to exclude all categories of utility theory, which could not be reduced to individual psychological feelings, and to stop any attempt to quantify the utility as being in the sphere of subjective sensations.

In the subsequent goals (1920-1970) Marginal utility theory has evolved and more firmly established in the educational

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