marginalism
Additional unit analysis
Marginalism is an economic theory holding that value derives from the additional satisfaction gained from one more unit of a good—the marginal utility—rather than from total usefulness or labor invested.
This approach revolutionized economics in the late 19th century, explaining why diamonds cost more than water despite water being essential: the marginal unit of water adds little when supply is abundant.
Marginalism shifted economic analysis from production costs to consumer choices at the margin.
Reduced benefit from additional effort
- consumer choiceBuyer's range of alternatives
- demand curveGraph of price versus quantity
- supply curvePrice-quantity relationship for producers
- opportunity costSacrificed alternative's worth
Preference for certainty
- consumptionUsing up of resources
- satiationState of complete fulfillment
- pleasureHappy, satisfied feeling
- welfareComfort and prosperity
Differentiation fixing other variables
- differential calculusStudy of instantaneous rates
- slopeAngled terrain or steepness
- tangentLine touching curve once
- optimizationMaximizing efficiency or performance
Insufficiency of something needed
- imputationAscribing fault to another
- market priceCurrent exchange value
Inefficient resource distribution
- externalitiesUncompensated effects on others
- cost-benefit analysisSystematic comparison of advantages, disadvantages
- resource allocationAssigning available means strategically
diminishing returns
Reduced benefit from additional effort
- consumer choiceBuyer's range of alternatives
- demand curveGraph of price versus quantity
- supply curvePrice-quantity relationship for producers
risk aversion
Preference for certainty
- consumptionUsing up of resources
- satiationState of complete fulfillment
- pleasureHappy, satisfied feeling
partial derivative
Differentiation fixing other variables
- differential calculusStudy of instantaneous rates
- slopeAngled terrain or steepness
- tangentLine touching curve once
scarcity
Insufficiency of something needed
- imputationAscribing fault to another
- market priceCurrent exchange value
market failure
Inefficient resource distribution
- externalitiesUncompensated effects on others
- cost-benefit analysisSystematic comparison of advantages, disadvantages
- resource allocationAssigning available means strategically
- marginalized groupPopulation facing systemic exclusion
- marginalized communityGroup facing systemic exclusion
- marginalized communitiesGroups lacking social power
- marginalized voicesSpeakers from excluded communities
- marginalized populationsGroups excluded from mainstream society
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