3.5 — Marshallian Economics II: Supply & Theory of the Firm — Readings

Monday, October 26, 2020

Required Readings:

• Finish Ch.10 “Alfred Marshall and Neoclassical Economics” in Landreth & Colander
• Ch.10 “Marshallian Economics: Cost and Supply” in Blaug

Recommended Readings:

• Marshall, Alfred, 1920 (1890), Principles of Economics (8th ed.)

The following Wikipedia entries can also provide more background:

• Alfred Marshall
• Tax incidence
• Long run and short run
• Fixed cost
• Variable cost
• Cost curve
• Quasi-rent
• Economies of scale
• Economies of scale in Marshall
• Quantity Theory of Money (Cambridge Approach)

Questions to Help Your Reading

• What are the four “periods” (or “runs”) according to Marshall? What is different about the supply curve in each?
• What do you recognize from your principles & intermediate microeconomics courses from Marshall?
• What is a “quasi-rent”? Why does it only exist in the short run?
• What is a constant-cost, increasing-cost, and decreasing-cost industry?
• What are interval vs. external economies of scale? What are the implications for competition vs. monopoly?
• How does Marshall’s view of money and the quantity theory differ from Fisher?