When does neoclassical economics start?
What is the theme of Neoclassical economics?
It is not all or nothing, its extra/additional thinking
Who founded Austrian Economics?
How is homo Economicus relevent
Jeremy Bentham and the role of utils
Marginal thinking requires that one severely consider the beneits and the costs
What paradox does this resolve?
The diamond water paradox
The marginal utility of diamonds is very high--> diamonds have a greater value
Sovereignty, what they desire is what the market produces
One basic difference between classical economists and neoclassical ones?
Classical economists put more of an emphasis on the supply side
Neoclassicals put more of an emphasis on the demand side-> how do consumers get the greatest satisfaction at margin
How are consumers viewed in neoclassical economics?
As utility maximizers
Perfect competition ideally will lead to?
Allocative efficiency occurs when?
What book did John Bates Clark Write?
Distribution of wealth
What does bates write about concerning full employment?
That workers should only be hired if their real wage is equal to that which they contribute to the firm
The Marginal Revenue Product
What is MRP
Wages divided by the profit
Draw the graph of the labor market
consider W/P and MRP
When will full employment occur?
When the MRP= the W/P
Describe the Marginal Productivity Theory of Income Distribution
The wage a worker receives should equal the value of their marginal product
This only occurs in a perfectly competitive market
What did Jevons contribute to?
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