William Stanley Jevons

Definition

William Stanley Jevons was a British economist and logician known for his foundational work in the development of marginal utility theory, which played a critical role in the Marginal Revolution of the late 19th century. He introduced the concept that individuals make decisions based on the additional satisfaction or utility gained from consuming one more unit of a good, rather than total consumption, reshaping economic thought and influencing later economists like Alfred Marshall and Léon Walras.

5 Must Know Facts For Your Next Test

1. Jevons published 'The Theory of Political Economy' in 1871, where he presented his ideas on marginal utility and its implications for price determination.
2. He is credited with formulating the 'Jevons Paradox,' which suggests that increased efficiency in resource use can lead to greater overall consumption.
3. Jevons emphasized the importance of quantitative analysis in economics, advocating for the use of mathematical models to represent economic behavior.
4. His work marked a significant departure from classical economics, which focused on total utility rather than marginal changes.
5. Jevons' theories laid the groundwork for modern microeconomic analysis, influencing concepts such as demand curves and consumer choice.

Review Questions

• How did Jevons' introduction of marginal utility change the way economists view consumer behavior?
  • Jevons' introduction of marginal utility shifted the focus from total utility to the additional satisfaction gained from consuming one more unit of a good. This perspective highlighted how consumers make choices based on incremental changes, fundamentally altering economic theories related to demand and consumption. By emphasizing that individuals aim to maximize their utility through careful allocation of resources, Jevons helped economists understand decision-making in a more precise and analytical manner.
• In what ways did Jevons' work contribute to the broader Marginal Revolution alongside Menger and Walras?
  • Jevons' work contributed significantly to the Marginal Revolution by presenting a systematic approach to understanding economic behavior through marginal analysis. Alongside Carl Menger and Léon Walras, he developed key concepts such as marginal utility and equilibrium, emphasizing how these ideas explain pricing and resource allocation in markets. This collective shift away from classical economics towards a focus on individual choice and marginal changes marked a turning point in economic thought that shaped modern economics.
• Evaluate the long-term impact of Jevons' theories on contemporary economic practices and policies.
  • The long-term impact of Jevons' theories is evident in contemporary economic practices, particularly in microeconomics where concepts like utility maximization and consumer choice remain central. His ideas influence policy-making related to resource allocation, pricing strategies, and market analysis. Furthermore, Jevons' emphasis on mathematical modeling set the stage for rigorous empirical research in economics, leading to advancements in behavioral economics and welfare analysis that continue to inform policy decisions today.

Related terms

Marginal Utility: The additional satisfaction or benefit received from consuming one more unit of a good or service.

Utility Maximization: The economic principle that individuals seek to allocate their resources in a way that maximizes their overall satisfaction or utility.

Indifference Curve: A graph representing different combinations of goods that provide the same level of utility to a consumer, illustrating preferences and trade-offs.