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Devised by Swiss mathematician Leonhard Euler (1707-1783), Euler’s theory is a theory of distribution based on marginal productivity.
Euler showed that under constant returns to scale, if each factor of production is paid the value of its marginal product, total output (income) will be completely exhausted.
Written by: Jayashree Pakhare
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The surrender of equal measures of utility by taxpayers.

Equal sacrifice theory has three sub-groups:
1. Equal absolute sacrifice (where each taxpayer surrenders the same absolute degree of utility that he obtains from his income).
2. Equal proportional sacrifice (where each sacrifices the same proportion of utility he receives from his income).
3. Equal marginal sacrifice (where each gives [...]

Body of analysis examining the balance of interrelated variables of an economy and their tendency to resist change.

Classical economic theory, outlined by Scottish economist Adam Smith (1723-1790) and English economist David Ricardo (1772-1823), regarded market prices as fluctuating around the natural price (which can be considered a central price towards which market prices tend). Another [...]

The wealth of Nations is a very famous book about capitalism. Many economists would agree that the wealth of Nations is The book of capitalism. It was written by Adam Smith which was one of the first and one of the most important capitalists of all time. His metaphor of an invisible hand has become [...]

Axiomatic theories relating to consumer behavior and rationality, and are an essential part of consumer demand theory and indifference curve analysis.

The axioms of rationality are:
- completeness (the ability to order every available combination of goods according to preference);
- transitivity (relationship between different combination preferences); and
- selection (the consumer will aim for the most desired combination).
The [...]