Marginalism

Question 1

School ideas

Answer 1

1. Stronger emphasis on behaviour of individual agents: Microeconomic focus
2. Increased focus on demand side: Focus on marginal principle
3. More reliance on mathematics in economics
4. Rational behaviour
5. Equilibrium approach
6. Limited role for government

Question 2

Thunen, Cournot & Depuit

Answer 2

Thunen: theory of location

Cournot: Price formation in monopoly and duopoly, law of demand

Depuit: Marginal utility curve

Question 3

Jevons

Answer 3

1. Total utility vs. Marginal utility

2. Solve water-diamond paradox > price determined by marginal utility

Question 4

Menger

Answer 4

Price determined by total utility and not marginal utility

Question 5

*Walras

Answer 5

Mathematical general equilibrium model