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Principles of Economics; Marshall, Alfred
3 paragraphs found.
See Note I. in the Mathematical Appendix at the end of the Volume. This law holds a priority of position to the law of diminishing return from land; which however has the priority in time; since it was the first to be subjected to a rigid analysis of a semi-mathematical character. And if by anticipation we borrow some of its terms, we may say that the return of pleasure which a person gets from each additional dose of a commodity diminishes till at last a margin is reached at which it is no longer worth his while to acquire any more of it.

The term marginal utility ( Grenz-nutz) was first used in this connection by the Austrian Wieser. It has been adopted by Prof. Wicksteed. It corresponds to the term Final used by Jevons, to whom Wieser makes his acknowledgments in the Preface (p. xxiii. of the English edition). His list of anticipators of his doctrine is headed by Gossen, 1854.

Again, since sheep and oxen compete for the use of land, leather and cloth compete in indirect demand for the use of a factor of production. But also in the upholsterer's shop they compete as supplying means for meeting the same want. There is thus a composite demand on the part of upholsterer and shoemaker for leather; and also for cloth when the upper part of a shoe is made of cloth: the shoe offers a joint demand for cloth and leather, they offering complementary supplies: and so on, in endless complications. See Mathematical Note XXI. The Austrian doctrine of "imputed value" has something in common with that of derived value given in this chapter. Whichever phrase be used, it is important that we should recognize the continuity between the old doctrine of value and the new; and that we should treat imputed or derived values merely as elements which take their place with many others in the broad problem of distribution and exchange. The new phrases merely give the means of applying to the ordinary affairs of life, some of that precision of expression which is the special property of mathematical language. Producers have always to consider how the demand for any raw material in which they are interested is dependent on the demand for the things in making which it is used, and how it is influenced by every change that affects them; and this is really a special case of the problem of ascertaining the efficient strength of any one of the forces, which contribute to a common result. In mathematical language this common result is called a function of the various forces: and the (marginal) contribution, which any of them is making to it, is represented by the (small) change in the result which would result from a (small) change in that force; that is by the differential coefficient of the result with regard to that force. In other words, the imputed value, or the derived value of a factor of production, if used for only one product, is the differential coefficient of that product with regard to that factor; and so on in successive complications, as indicated in Notes XIV.—XXI. of the Mathematical Appendix. (Some objections to parts of Prof. Wieser's doctrine of imputed values are well urged by Prof. Edgeworth, Economic Journal, Vol. V. pp. 279-85.)
Appendix I

It seemed right to select Jevons' attack for reply, because, in England at all events, it has attracted more attention than any other. But somewhat similar attacks on Ricardo's theory of value had been made by many other writers. Among them may specially be mentioned Mr Macleod, whose writings before 1870 anticipated much both of the form and substance of recent criticisms on the classical doctrines of value in relation to cost, by Profs. Walras and Carl Menger, who were contemporary with Jevons, and Profs. v. Böhm-Bawerk and Wieser, who were later.