Economics Dictionary of ArgumentsHome
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| Marginal utility: Marginal utility measures the additional satisfaction or benefit gained from consuming one more unit of a product or service. As consumption increases, the marginal utility often decreases due to diminishing returns—each additional unit provides less additional satisfaction. This concept is fundamental in understanding consumer choices, preferences, and demand for goods or services. See also Utility, Benefit, Marginal return._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Marginal Utility - Dictionary of Arguments
Rothbard III 72 Marginal utility/Rothbard: For example, it is erroneous to argue as follows: It is possible that a man needs four eggs to bake a cake. In that case, the second egg may be used for a less urgent use than the first eg…(etc.) Rothbard III 73 This argument neglects the fact that a “good” is not the physical material, but any material whatever of which the units will constitute an equally serviceable supply. >Consumer goods/Rothbard, >Capital goods/Rothbard. Rothbard III 301 Marginal utility/Rothbard: Purchasing power: Even if we confine ourselves to the same period, monetary incomes are not an infallible guide. There are, for example, many consumers’ goods that are obtainable both through monetary exchange and outside the money nexus. >Purchasing power/Rothbard. Psychic income: Neither can we measure psychic incomes if we confine ourselves to goods in the monetary nexus. >Income/Rothbard. Utility/marginal utility: It follows that the law of the diminishing marginal utility of money applies only to the valuations of each individual person. There can be no comparison of such utility between persons. Thus, we cannot, as some writers have done, assert that an extra dollar is enjoyed less by a Rockefeller than by a poor man. If Rockefeller were suddenly to become poor, each dollar would be worth more to him than it is now; similarly, if the poor man were to become rich, his value scales remaining the same, each dollar would be worth less than it is now. RothbardVsTradition: A doctrine commonly held by writers on utility is that the consumer acts so as to bring the marginal utility that any good has for him into equality with the price of that good. Rothbard III 302 RothbardVsJevons: Now, if a writer couches the exposition in terms of highly divisible goods, such as butter, and in terms of small units of money, such as pennies, it is easy to leap unthinkingly to the conclusion that the consumer for each good will act in such a way as to equalize, at the market price, the marginal utility of the sum of money and the marginal utility of the good. It should be clear, however, that there is never any such “equalization.” Even in the case of the most divisible of goods, there will still be a difference in rank, not an equalization, between the two utilities. Of course, the consumer tries to spend his money so as to bring the two as close as possible, but they can never be equal. Furthermore, the marginal utility of each particular good, after the purchases are made, differs in rank from that of every other. >Marginal utility/W. St. Jevons, >Marginal utility of money/Rothbard. Rothbard III 464 Marginal utility/price/Rothbard: The marginal utility of a unit of a good is determined by a man’s diminishing marginal utility schedule evaluating a certain supply or stock of that good. Similarly, the market’s establishment of the price of a consumers’ good is determined by the aggregate consumer demand schedules—diminishing—and their intersection with the given supply or stock of a good. >Factor market/Rothbard, >Factors of production/Rothbard, >Marginal product/Rothbard._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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