Psychology Dictionary of ArgumentsHome
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| Consumption: In economics, consumption refers to the act of using goods and services to satisfy current needs and wants. It is a key component of economic activity and is measured as part of gross domestic product (GDP). Consumption is driven by factors such as income, wealth, preferences, and expectations. Consumption is a key component of the economy, influencing production, demand for goods, and overall economic growth. See also economic growth, Economy, Preferences._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Neoclassical Economics on Consumption (Economics) - Dictionary of Arguments
Mause I 53 Consumption theory/Neoclassical theory: Consumption theory is based on subjective value theory, i.e. the assumption that the value of a good depends exclusively on its subjectively perceived value. If one assumes decreasing marginal utility (i.e. the benefit of an additionally consumed unit of a good is the smaller the more of this good is already consumed), then the central result of consumer theory can be derived, the marginal utility compensation law. Accordingly, households maximise their benefits by consuming so much of each good that the marginal benefits are the same relative to the respective commodity prices. This law implies that the exchange value, i.e. the price of a good, is determined by its marginal utility. In this way, the famous value paradox could be solved, which says that important and useful goods (such as water) can be much cheaper than unimportant goods of little use (such as diamonds). Since the marginal utility determines the price and that decreases with the increase in the available quantity, very useful goods can also be cheap if they are abundant, or less useful goods can be expensive if they are rare._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Neoclassical Economics Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
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> Counter arguments in relation to Consumption (Economics)
