MICROECONOMICS IN GERMANY the most important economic work that has been done in the Continent in this century

(19th) is that of Germany - Alfred Marshall, Principles of Economics JOHANN HEINRICH VON THUNEN the father of location theory in economics I. Von Thunen is given credit for several important and original anticipations of modern economic theory: A. concept of economic rent B. diminishing returns C. opportunity costs D. marginal-productivity theory of wages E. * pioneer in the economic theory of location II. THE ECONOMICS OF LOCATION finding the least-cost location for each crop A. recognized the differences in the cost of producing agricultural products resulting from location [Ricardo used differences in land fertility/soil quality instead] the distance from a central selling point 1. also recognized that those products that are bulky in relation to value are more costly to transport than those that are less so B. assumed that labor and capital are equally productive at all location BUT it is transport costs that make for differences in costs of production and therefore, market value HERMANN HENRICH GOSSEN I. The very first writer who developed a thorough theory of consumption grounded in the marginal principle II. attempted to mathematize Benthams hedonic calculus A. viewed economics as the theory of pleasure and pain how people or individuals and as groups may achieve the maximum of pleasure with the minimum of painful effort B. insisted that mathematical treatment was the only reliable way of handling economic relations III. Major Publication: Development of the Laws of Human Relationships and of Rules to Be Derived Therefrom for Human Action A. Formulated the principle of diminishing marginal utility and also gave it graphical expression B. described the condition for utility maximization: to maximize utility, a given quantity of a good must be divided among different uses in such a manner that the marginal utilities are equal in all uses HANS KARL EMIL VON MANGOLDT I. developed the theory of profit and the role of the entrepreneur A. made a distinction between the capitalist and the entrepreneur B. linked entrepreneurial profit to risk-taking 1. entrepreneurial profit the reward for: finding particular markets, clever acquisition of productive agents, skillful combination of factors of production on the right scale, successful sales policy and innovation

II. attempted to rework the main parts of economic theory ( why he did that, we will never know) A. demand and supply in a Marshallian way B. attempts at explaining elasticity C. economies of scale D. a discussion of multiple equilibria E. graphical analysis of price formation under conditions of joint supply and demand