Marginalist school

Question 1

What were Cournot’s main contributions?

Answer 1

1. maths to economic analysis
2. Law of demand
3. Theory of monopoly & duopoly in price formation

Question 2

What were Depuit’s main contributions?

Answer 2

Marginal utility curve

Question 3

What were Thunen’s main contributions?

Answer 3

Theory of location - diminishing marginal productivity of labour, MP=MR, transportation costs

Question 4

What did Jevons want more in the economic world?

Answer 4

Use of more mathematics

Question 5

What theory of Adam Smith did Jevons solve with his theory of utility?

Answer 5

Water-diamond paradox > price determined by marginal utility

Question 6

What theory did Jevons contribute?

Answer 6

1. Distinction between marginal utility and total utility

2. Law of decreasing marginal utility for price determination (D side)

Question 7

What was distinct about Menger’s theory of value?

Answer 7

He thought total utility should be used to determine price and not marginal utility

Question 8

What were Walras’ main contributions?

Answer 8

1. Focus on margin

2. General equilibria (others did so partially but he did it for a world view)

Question 9

Briefly explain Walras’ general equilibrium model.

Answer 9

Consumers maximize utility, producers maximize profits
Consumer’s demand is equal to firm’s supply for all goods
Firm’s demand is equal to the consumer’s supply for all factors of production