Marginal Utility - Marginalist Theory

Marginalist Theory

Marginalism explains choice with the hypothesis that people decide whether to effect any given change based on the marginal utility of that change, with rival alternatives being chosen based upon which has the greatest marginal utility.

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Famous quotes containing the word theory:

    “By the “mud-sill” theory it is assumed that labor and education are incompatible; and any practical combination of them impossible. According to that theory, a blind horse upon a tread-mill, is a perfect illustration of what a laborer should be—all the better for being blind, that he could not tread out of place, or kick understandingly.... Free labor insists on universal education.”
    —Abraham Lincoln (1809–1865)