The Marginalists - Term Paper Example

Task: Question An identity of any sense, gains from the analytical entity that it belongs. Walras is an economics’ theoristwho considers himself a pure marginalist. In this sense, social wealth consists of utility and scarcity. This article explores his concept of scarcity in order that it illuminates his concept of a definitional identity. Walras constructed equations out of consumer demands. He initially used simple equations and increased their complexity in the end.In this concept, he explains that all markets exist in a similar state (Canterbery 135).

Therefore, if one market is at equilibrium, all other markets are at equilibrium. This means that excess demand or supply in one market would be offset by another in a different market. The same phenomenon holds for the state of disequilibrium such that all markets exist at disequilibrium simultaneously.Question 2In his approach of returns to scale, Marshall noted that a firm’s productivity increase more proportionately in the short run. This occurs because of effects of specialization of labor and existence of fixed costs.

In the long run, a firm experiences a proportionate increase in productivity since the fixed costs are exhausted and that the firm can no longer benefit from specialization (Canterbery 135). It is vital to note that when a firm is harnessing economies of scale, it reaches its minimum effect scale at a level that other firms cannot harness over a short period thereby causing monopoly.Question 3Clark’s arguments rest on the productive capacity of the last unit of capital. In this sense, heterogonous capital goods have a form as homogenous goods (Canterbery 127).

The productivity of the last homogenous quantity determines the profit. This differed from the Karl’s view of heterogonous goods as determination of profits. The criticism of this theory regards the fact that Clark present production units as abstract concepts that do not unify to influence profits.Works CitedCanterbery, Ray. A brief history of economics: artful approaches to the dismal science. Hackensack, NJ: World Scientific, 2010.