---
date: '2024-01-09'
description: net value function fundamentals including cost-benefit analysis, marginal value, quantity-dependent conversion factors, and system net value calculations.
id: Net Value Function
modified: 2026-06-05 15:08:34 GMT-04:00
tags:
  - eng3px3
title: Net value function
created: '2024-01-09'
published: '2024-01-09'
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---
See [[thoughts/university/twenty-three-twenty-four/eng-3px3/3PX3 Net Value Functions.pdf|slides]]

## What is economics?

> Relocation of resources

> everything _has_ a cost

Cost-benefit analysis
_Jules Dupuit_ See [Economics evolving: a history of economic thought by _Agnar Sandmo_](https://press.princeton.edu/books/paperback/9780691148427/economics-evolving)

## Net Value functions

$$
\text{Net value = [Benefit] - [Cost]}
$$

- relativity
- perspective: $\text{(Benefit - Cost)}_{\text{client}}$

$$
\text{Benefits}_{\text{client}} > \text{Sale Price} > \text{Cost}_{\text{producer}}
$$

$$
\text{System Net Value =} \space \text{Benefits}_{\text{client}} - \text{Cost}_{\text{producer}}
$$

$$
\text{NVF = Benefits - Cost of space - Cost of time - ...}
$$

Unit matching and conversion

> \[!notes\] marginal value, quantity-dependent value
>
> _marginal net value_ of buying an apple is the change in NV from buying one more apple (slope of NVF wrt number of apple bought) either subsequent items gives more NV or lower costs. ^marginal-value

![[thoughts/university/twenty-three-twenty-four/eng-3px3/marginal-apple-q.webp]]