economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analy ...

, marginal concepts are associated with a ''specific change'' in the quantity used of a

good In most contexts, the concept of good denotes the conduct that should be preferred when posed with a choice between possible actions. Good is generally considered to be the opposite of evil and is of interest in the study of ethics, morality, p ...

service Service may refer to: Activities * Administrative service, a required part of the workload of university faculty * Civil service, the body of employees of a government * Community service, volunteer service for the benefit of a community or a pu ...

, as opposed to some notion of the over-all significance of that class of good or service, or of some total quantity thereof.{{citation needed, date=February 2012

Marginality

Constraints are conceptualized as a ''border'' or ''margin''. Wicksteed, Philip Henry; ''The Common Sense of Political Economy'' (1910), Bk I Ch 2 and elsewhere. The location of the margin for any individual corresponds to his or her ''endowment'', broadly conceived to include opportunities. This endowment is determined by many things including physical laws (which constrain how forms of energy and matter may be transformed), accidents of nature (which determine the presence of natural resources), and the outcomes of past decisions made both by others and by the individual himself or herself. A value that holds true given particular constraints is a ''marginal'' value. A change that would be affected as or by a specific loosening or tightening of those constraints is a ''marginal'' change, as large as the smallest relevant division of that good or service.von Wieser, Friedrich; ''Über den Ursprung und die Hauptgesetze des wirtschaftlichen Wertes'' /nowiki>''The Nature and Essence of Theoretical Economics''/nowiki> (1884), p. 128. For reasons of tractability, it is often assumed in neoclassical analysis that goods and services are continuously divisible. In such context, a marginal change may be an infinitesimal change or a

limit Limit or Limits may refer to: Arts and media * ''Limit'' (manga), a manga by Keiko Suenobu * ''Limit'' (film), a South Korean film * Limit (music), a way to characterize harmony * "Limit" (song), a 2016 single by Luna Sea * "Limits", a 2019 ...

. However, strictly speaking, the smallest relevant division may be quite large.

Some important marginal concepts

The marginal use of a good or service is the specific use to which an agent would put a given increase, or the specific use of the good or service that would be abandoned in response to a given decrease. The

marginal utility In economics, utility is the satisfaction or benefit derived by consuming a product. The marginal utility of a good or service describes how much pleasure or satisfaction is gained by consumers as a result of the increase or decrease in consumpti ...

of a good or service is the

utility As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosoph ...

of the specific use to which an agent would put a given increase in that good or service, or of the specific use that would be abandoned in response to a given decrease. In other words, marginal utility is the utility of the marginal use. The

marginal rate of substitution In economics, the marginal rate of substitution (MRS) is the rate at which a consumer can give up some amount of one good in exchange for another good while maintaining the same level of utility. At equilibrium consumption levels (assuming no exte ...

is the rate of substitution that is the least favorable rate, at the margin, at which an agent is willing to exchange units of one good or service for units of another. A marginal benefit is a benefit (howsoever ranked or measured) associated with a marginal change. The term “ marginal cost” may refer to an

opportunity cost In microeconomic theory, the opportunity cost of a particular activity is the value or benefit given up by engaging in that activity, relative to engaging in an alternative activity. More effective it means if you chose one activity (for exampl ...

at the margin, or more narrowly to marginal pecuniary cost — that is to say marginal cost measured by forgone

cash flow A cash flow is a real or virtual movement of money: *a cash flow in its narrow sense is a payment (in a currency), especially from one central bank account to another; the term 'cash flow' is mostly used to describe payments that are expected ...

. Other marginal concepts include (but are not limited to): * marginal physical product (sometimes also known as “marginal product”) ** marginal product of labor **

marginal product of capital In economics, the marginal product of capital (MPK) is the additional production that a firm experiences when it adds an extra unit of capital. It is a feature of the production function, alongside the labour input. Definition The marginal produ ...

marginal rate of transformation Marginal may refer to: * ''Marginal'' (album), the third album of the Belgian rock band Dead Man Ray, released in 2001 * ''Marginal'' (manga) * '' El Marginal'', Argentine TV series * Marginal seat or marginal constituency or marginal, in polit ...

, the rate at which one output or result must be sacrificed in order to increase another output or result * marginal revenue product *

marginal propensity to save The marginal propensity to save (MPS) is the fraction of an increase in income that is not spent and instead used for saving. It is the slope of the line plotting saving against income. For example, if a household earns one extra dollar, and th ...

and consume * marginal tax rate *

marginal efficiency of capital Marginal may refer to: * ''Marginal'' (album), the third album of the Belgian rock band Dead Man Ray, released in 2001 * ''Marginal'' (manga) * '' El Marginal'', Argentine TV series * Marginal seat or marginal constituency or marginal, in polit ...

Marginalism Marginalism is a theory of economics that attempts to explain the discrepancy in the value of goods and services by reference to their secondary, or marginal, utility. It states that the reason why the price of diamonds is higher than that of wa ...

is the use of marginal concepts to explain economic phenomena. The related concept of elasticity is the ratio of the incremental percentage change in one variable with respect to an incremental percentage change in another variable.

Marginality

Some important marginal concepts

References