Question

01.    The historical background of “marginalism” (a/k/a “The Marginalist School of Economic Thought”) included

         a.      widespread poverty – despite rising productivity and a rising standard of living.

         b.      undeniable business fluctuations – expansions and contractions.

         c.       long working hours and dangerous working conditions for many.

         d.      all of the above.

Answer 1

The correct answer is Option D - all of the above.

All the points mentioned in the options are true. The marginalist school focused on economic liberty and explained how the market allocated resources efficiently. This school of thought was developed by different economists living in different parts of the world, with the same goal in mind. The socio-economic status of the post-industrialisation period moved economists to work on the theory. Poor working conditions at factories led to industrial accidents without giving compensation to the workers. Further, despite increasing productivity, poverty was still widespread. The unven distribution of income created dissatisfaction among people, though the standard of living improved. Fluctuations in business activity impacted people to a great extent, creating insecurity among them.