[quote="Qaarxiye"]Classical economics proceeded from the assumption of scarcity, such as the law of diminishing returns and Malthusian population doctrine. Dating from the 1870s, neoclassicist economists such as William Stanley Jevons in Britain, Léon Walras in France, and Karl Menger in Austria shifted emphasis from limitations on supply to interpretations of consumer choice in psychological terms. Concentrating on the utility or satisfaction rendered by the last or marginal unit purchased, neoclassicists explained market prices not by reference to the differing quantities of human labor needed to produce assorted items, as in the theories of Ricardo and Marx, but rather according to the intensity of consumer preference for one more unit of any given commodity.
The British economist Alfred Marshall, particularly in his masterly neoclassicist work Principles of Economics (1890), explained demand by the principle of marginal utility, and supply by the rule of marginal productivity (the cost of producing the last item of a given quantity). In competitive markets, consumer preferences for low prices of goods and seller preferences for high prices were adjusted to some mutually agreeable level. At any actual price, then, buyers were willing to purchase precisely the quantity of goods that sellers were prepared to offer.
As in markets for consumer goods, this same reconciliation between supply and demand occurred in markets for money and human labor. In money markets, the interest rate matched borrowers with lenders. The borrowers expected to use their loans to earn profits larger than the interest they had to pay. Savers, for their part, demanded a price for postponing the enjoyment of their own money. A similar accommodation had to be made in wages paid for human labor. In competitive labor markets, wages actually paid represented at least the value to the employer of the output attributed to hours worked and at least acceptable compensation to the employee for the tedium and fatigue of the work.
By implication, if not direct statement, the tendency of neoclassical doctrine has been politically conservative. Its advocates distinctly prefer competitive markets to government intervention and, at least until the Great Depression of the 1930s, insisted that the best public policies were echoes of Adam Smith: low taxes, thrift in public spending, and annually balanced budgets. Neoclassicists do not inquire into the origins of wealth. They explain disparities in income as well as wealth for the most part by parallel differences among human beings in talent, intelligence, energy, and ambition. Hence, men and women succeed or fail because of their individual attributes, not because they are either beneficiaries of special advantage or victims of special handicaps. In capitalist societies, neoclassical economics is the generally accepted textbook explanation of price and income determination.
Microsoft ® Encarta ® 2006. © 1993-2005 Microsoft Corporation. All rights reserved.[/quote]
Thank you!!!!! thats the kind of thing I needed for my intro, the rest is easy!
Darn, shoulda done more reading 
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