Economics Theory

Paper Summary:

The paper explains economic theory on the basis of marginal theory and marginal analysis and shows how economic theory is often based upon the philosophy of utilitarianism. The paper offers plenty of examples of the practical application of economic theory and marginal analysis. The paper concludes that economic theory can be applied in any sector and especially in areas where one wishes to analyze one's profits against one's investment.

From the Paper:

"A popular concept that is used both in macro economic theory, as well as in micro economic theory is that of marginal change. Marginal analysis is therefore one of the most important principles of economic theory, and one must study a few concepts of economic theory before one can proceed. Marginal change can be explained as a small addition or subtraction, in proportional comparison, to the total quantity of some variable. On the other hand, marginal analysis can be described as the analysis or the study of the relationships that are brought about by marginal changes, in related economic variables. As far as micro economic theory is concerned, marginal concepts are utilized primarily in order to explicate several different forms of optimizing behavior. For example, while customers are stated to be maximizing their utility or their satisfaction, companies are stated to be maximizing their profits. (Johnson, 2005) "

Sample of Sources Used:

• Evans, Edward. (2005) "Marginal analysis, an economic procedure for selecting alternative technologies/practices". University of Florida, Institute of Food and Agricultural Sciences. Retrieved 15 December, 2007 from http://edis.ifas.ufl.edu/FE565
• Johnson, Paul. M. (2005) "Marginal Analysis: A glossary of political economic terms" Retrieved 15 December, 2007 from http://www.auburn.edu/~johnspm/gloss/marginal_analysis
• McConnell, Campbell R; Brue, Stanley L. (2005) "Economics, principles, problems and policies" McGraw-Hill Professional.
• McEachern, William A. (2006) "Macroeconomics, a contemporary introduction" Thomson South-Western.
• N. A. (n. d.) "Decision making using marginal analysis" Retrieved 15 December, 2007 fromhttp://people.eku.edu/watkinst/Economics%20120/Decision-making.doc

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