Econ 1500 Assignment Example | Topics and Well Written Essays - 250 words

Econ 1500 - Assignment Example It originated from the classical economists, but later adopted by modern Marxist economics, i.e. Karl Marx. Value exists in three different concepts i.e. utility, use value, and exchange value. In classical economist’s viewpoint, labor input determines the value of a good or service. On the other hand, marginalists believe that a buyer of a good determines its utility, and this fluctuates with consumption patterns. Therefore, the major transition involves labor as the cornerstone of valuation of a product to utility as the form of valuation of a product (Hartwick and Peet 1). Which economists/philosophers derived economic information and theories on â€Å"utility†, the â€Å"equi-marginal principle†, and â€Å"opportunity cost† principles in economics that we use in today’s economic analysis? Identify the concepts and economists, and then briefly explain these three economic principles. Paul Samuelson derived the theory of utility. The concept of utility describes the tastes and preferences associated with consumer’s consumption patterns. This comes from the dual side analysis of value and price i.e. demand and supply sides. Herbert Simon invented the concept of opportunity cost. This is the cost of an activity measured against the foregone value of the next best alternative, i.e. the sacrifice in relation to the next best choice taken among mutually exclusive choices. The principle of equi-marginal utility was the brainchild of Hermann Heinrich Gossen. This concept is an extension of diminishing marginal utility law as it explains how a consumer behaves while distributing his or her limited income between various services and goods. This law dictates that a consumer will allocate his money income among several goods in order to derive maximum