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Alfred Marshall

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on 7 October 2013

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Transcript of Alfred Marshall

Alfred Marshall
design by Dóri Sirály for Prezi
British economist from the 1800s - 1900s
Born 26th July, 1842, died 13th July, 1924
Born in London
Died in Cambridge, England
Studied at St. John's College, Cambridge
Studied math,
philosophy, and

Who? (contd)
Became a professor at Cambridge after receiving a fellowship in 1865 - taught political economy
Also taught at Balliol College, Oxford - 1883 to 1885
Published first edition of his most successful book,
His Focus
Some Lasting Ideas
"Principles of Economics" (volume 1) published in 1890
Most important book
Basic ideas:
Supply and demand
created the standard supply and demand graph
Consumer surplus (created by Jules Depuit, publicized by Marshall)
The 3 periods
this guy
Retired in 1908
"Principles of Economics" (volume 1)
in 1890
In the 1880s:
- The second industrial revolution
- "The period from 1870 to 1890 saw the greatest increase in economic growth in such a short period as ever in previous history" (5)
- Unemployment
- Lots more consumerism

"The branch of economics that analyzes the market behavior of individual consumers and firms in an attempt to understand the decision-making process of firms and households" (2)
The smaller picture

Supply and demand
Supply and Demand (+Graphs)
Quantity - the amount of a product/service that is
wanted by consumers - at a specific price

Law of
higher the price, lower the
amount of product/service
wanted by consumers
- downward slope on graph
Demand Graph:
Quantity - the amount the market is willing to give - again, at a specific price
Law of
Greater price, more of that product/service given - upwards slope
Supply Graph:
Supply and Demand Graph -
Shows the ideal/equal distribution of goods at the equilibrium (the crossing point)!
Consumer Surplus
"Difference between the price a consumer pays for an item and the price he would be willing to pay rather than do without it (the market price)" (9)
"The price and output of a good are determined by both supply and demand: the two curves are like scissor blades that intersect at the equilibrium" (1)
The 3 Periods
Marshall defined 3 periods to look at how markets acclimatize to changes in demand/supply over a period of time:
1) First Period - Market Period
2) Second Period - Short Period
3) Third Period - Long Period
1) Market Period
- How long the product is at the starting price
2) Short Period
- The time when the number of a certain product is being increased through labour or other methods
- There is no more capital being invested
3) Long Period
- The time it takes for there to be a need for the increase in capital to uphold/continue to production of a good
E.g.: iPad3 introduced at $600. As long as the price of the iPad3 is at $600, this is the Market Period
E.g.: the production of the iPad3 is being increased by 200 iPads every month, but there is no increase in capital.
E.g.: It takes 3 months from the release of the iPad3 before capital must be increased in order to uphold the production of the iPad3s.
How have these ideas played a role in our current world?
All of these ideas are still used today
- Marshall was the father of modern economics - his ideas have shaped economists after him and they are still present now - lots of our economic ideas are from him!

- Consumer surplus is still prevalent today
- The 3 periods theory is still used to observe the impact of changing supply/demand in the market
- Supply and Demand are a fundamental concept of economics - it is the second chapter in our textbook!
Interesting Information
- Marshall is buried in the Ascension Parish Burial Ground

- Marshall has a library at the University of Cambridge named after him: "The Marshall Library of Economics"

- 1890-1924 - Known as the "respected father of the economic profession"
- For 50 years after, was known as the "venerable grandfather"
1. http://www.econlib.org/library/Enc/bios/Marshall.html
2. http://www.investopedia.com/terms/m/microeconomics.asp
3. http://en.wikipedia.org/wiki/Alfred_Marshall
4. http://www.brainyquote.com/quotes/authors/a/alfred_marshall.html
5. http://en.wikipedia.org/wiki/Second_Industrial_Revolution
6. http://synthesistblog.com/wp-content/uploads/2011/02/U2DSaF1.jpeg
7. http://www.britannica.com/EBchecked/topic/366539/Alfred-Marshall
8. http://www.investopedia.com/university/economics/economics3.asp
9. http://www.britannica.com/EBchecked/topic/134573/consumer-surplus

Thank you!
As a consumer - you want your price to be higher than the market price - you get a deal!
- Your price: $700 for an iPad3, market price: $600

As the market - market wants their price to be higher than the consumer's price - they get the deal! (As balanced as possible - not too high, not too low - or it won't sell)
- Market price: $600 for an iPad2, $500 for
He defined neoclassical economics
(supply and demand)
"His most important legacy was creating a respected, academic, scientifically founded profession for economists in the future that set the tone of the field for the remainder of the 20th century." (3)
Full transcript