Value of marginal utility
The marginal utility value theory was one of the values of economics developed in the early 1970s by evans of the united kingdom, mengel of austria and valais of france, and subsequently by pombavik and wiesel of austria。
The marginal utility value theory is at the heart and the basis of the marginal utility theory. According to marginal utility valuers, the value of the commodity is determined by the marginal utility of the commodity。
How the marginal utility value theory explains the value of the commodity
The marginal utility value theory is characterized by the use of utility to explain the process of value formation, noting that the value of a commodity is the perception and assessment of the utility of the commodity, which diminishes as people consume a particular commodity。
Effectiveness refers to the ability of goods to satisfy people's desires, while marginal utility refers to the amount of change in the total utility to consumers of each additional unit of a commodity。
Marginal utilityists argue that the value of the commodity is not an entity or an intrinsically objective attribute of the commodity. Value is nothing more than an expression of the relationship between human desires and the ability of objects to satisfy them, that is, the “perception and assessment” of the usefulness of the objects。
Goods can become indispensable to the well-being of people only when they are scarce for the satisfaction of human desires, and thus give rise to an assessment of value, which is measured by “marginal utility”。
Marginal utility is the usefulness of the last unit in a series of diminishing effects of an item, i. E. The least utility, which is the measure of the volume of the value of the commodity。
Economists point out that effectiveness is a source of value, a necessary rather than sufficient condition for value to be formed, and that value is contingent upon the scarcity of goods。
A combination of scarcity and effectiveness is a sufficient requirement for value formation. The scarcity here refers to the limited availability of goods。
People's desire for objects diminishes as they are constantly satisfied. If the supply is unlimited, the desire may be reduced to zero or even negative, i. E. Saturated or even repugnant. As a result, the marginal utility of the item diminishes and its value decreases or disappears as the supply increases。
Marginal utilityists have also proposed market price theory based on subjective value theory, arguing that market prices are the result of a balanced assessment of goods by both buyers and sellers under competitive conditions。
For example, when you're very hungry, it's fun to eat the first one, it's fun to eat the second one, but it's less fun to eat the first one, it's less fun to eat the third, four, five, and it's only painful to eat the tenth one。
As the same stimulus is repeated (the number of consecutive consumption of the same item increases), the level of excitement decreases (the marginal utility decreases)。
Assuming that consumer consumption of other commodities remains constant, the increase in utility received by consumers from each consumer unit where the commodity has increased continuously is decreasing。
A marginal effect on adam smuggles
Adam smith introduced a famous value paradox — the paradox between diamonds and water — in the state richness。
Nothing is more useful than water, but little can be used for water; instead, diamonds are of little use, but they can be used for a large quantity of goods。
It is difficult for adam smith to explain this phenomenon in his value theory, but it is sometimes inconsistent to derive the exchange and use values of goods. The value of water use is high, but there is little exchange value; on the contrary, diamonds are very low, but very high. Only the marginal utility value theory could solve the problem better。
On the one hand, water is important to life, so it should be of high value. Diamonds, on the other hand, are not important to life, so they should be considered less valuable than water. But even if water can be more effective, it is much cheaper than diamonds。
It is true that diamonds are much less useful than water, so that the overall effect of water consumption is far greater than that of diamond use. Thus, the price of demand for commodities is determined not by their overall utility but by their marginal utility。
It is true that diamonds are much less useful than water, so that the overall effect of water consumption is far greater than that of diamond use. However, the price of demand for commodities is determined not by their overall utility but by their marginal utility。
Diamonds, as a luxury, can be used in such a way as to show off, and in small quantities, so that an increase in the consumption of one unit of diamonds has a great effect on consumers, who are willing to spend more on them. While water is indispensable for human life and has a very high human impact, its price is naturally very low because of the large amount of water in the world and the low utility of increasing one unit of water。
