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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William Stanley Jevons on Marginal Utility - Dictionary of Arguments
Rothbard III 304 Marginal utility/Jevons/Rothbard: Jevons: „Let s be the whole stock of some commodity, and let it be capable of two distinct uses. Then we may represent the two quantities appropriated to these uses by x1 and y1, it being a condition that x1 plus y1 equal s. The person may be conceived as successively expending small quantities of the commodity; now it is the inevitable tendency of human nature to choose that course which appears to offer the greatest advantage at the moment. Hence, when the person remains satisfied with the distribution he has made, it follows that no alteration would yield him more pleasure; which amounts to saying that an increment of commodity would yield exactly as much utility in one use as in another. Let Δu1, Δu2, be the increments of utility, which might arise respectively from consuming an increment of commodity in the two different ways. When the distribution is completed, we ought to have Δu1 = Δu2 . . . The same reasoning . . . will evidently apply to any two uses, and hence to all uses simultaneously, so that we obtain a series of equations less numerous by a unit than the number of ways of using the commodity. The general result is that the commodity, if consumed by a perfectly wise being, must be consumed with a maximum production of utility.“(1) RothbardVsJevons: 1) 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/Roothbard, >Marginal utility of money/Rothbard, >Purchasing power/Rothbard. Utility/RothbardVsJevons: 2) The chief errors here consist in conceiving utility as a certain quantity, a definite function of an increment in the commodity, and in treating the problem in terms of infinitely small steps. Both procedures are fallacious. Utilities are not quantities, but ranks, and the successive amounts of a commodity that are used are always discrete units, not infinitely small ones. If the units are discrete, then the rank of each unit differs from that of every other, and there can be no equalization. 1. W. Stanley Jevons, The Theory of Political Economy (3rd ed.; London: Macmillan & Co., 1888), pp. 59–60._____________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. |
Jevons I William Stanley Jevons The Theory of Political Economy London 1871, 2015 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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