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econ434notes17b - 1820 French engineers use calculus to...

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1820- French engineers use calculus to tackle economic problems. Economic explanation for human behavior: behavior at the margin, optimization. P D S Q Cobweb model - If demand is more elastic, converges inwards. - Has some applications in agriculture, and other areas with long lead times. Jules Dupuit -Neoclassical economist Example of bridge problem: P Optimal distribution
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In the example of the bridge problem, the cost of getting the first person across is extremely high, but for every additional person that cost is zero. What should be done? -Price discrimination is the solution. Using the example of marginal utility: ~ Conclusion: P = MU ∆U ∆TC ---- = ---- ∆Q ∆Q Area under curve = revenue. If the total benefits exceed the total cost, then the decision should be made to build the bridge. Marginal utility is associated with demand. Marginalist Revolution -Austrians -Wieser: started writing equaltions. - Menger: brought in calculus -Lousanne-Walras -England -Jevons Antoine Cournot - school superintendent, terrible eyesight, left hard to read notations.
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