Marginal use
In economics the marginal use of a good or service is the specific use to which an individual would put a given increase, or the specific use of the good or service that would be abandoned in response to a given decrease.[1]
On the assumption that an individual is economically rational, each increase would be put to the specific feasible, previously unrealized use of great priority, and each decrease would result in abandonment of the use of lowest priority amongst the uses to which the good or service had been put.[1] The usefulness of the marginal use thus corresponds to the marginal utility of the good or service.[2]
The Austrian School of economics explicitly arrives at its conception of marginal utility as the utility of the marginal use, and “Grenznutzen” (the term from which “marginal utility” is derived in translation) literally means border-use; other schools usually do not make an explicit connection.[2]
References
- ^ a b von Wieser, Friedrich; Über den Ursprung und die Hauptgesetze des wirtschaftlichen Wertes [The Nature and Essence of Theoretical Economics] (1884), p. 128.
- ^ a b Mc Culloch, James Huston; “The Austrian Theory of the Marginal Use and of Ordinal Marginal Utility”, Zeitschrift für Nationalökonomie 37 (1977) #3&4 (September).