exception is called in microeconomics textbooks the consumption of a Giffen Good. An early formulation of the concept of production functions is due to Microeconomics is the study of the behaviour of individuals and small impacting organisations in making decisions on the allocation of limited resources. The modern field of microeconomics arose as an effort of neoclassical economics school of thought to put economic ideas into mathematical mode. "It may be opportune to begin with some remarks concerning the nature of economic theory and to discuss briefly the question of the role which mathematics may take in its development. First let us be aware that there exists at present no universal system of economic theory and that, if one should ever be developed, it will very probably not be during our lifetime. The reason for this is simply that economics is far too difficult a science to permit its construction rapidly, especially in view of the very limited knowledge and imperfect description of the facts with which economists are dealing. Only those wlio fail to appreciate this condition are likely to attempt the construction of universal systems. Even in sciences which are far more advanced than economics, like physics, there is no universal system available at present." A major problem discussed in this book if that of rational behavior under strategic situations involving other participants: "The word VALUE, it is to be observed, has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called ‘value in use;’ the other, ‘value in exchange.’ The things which have the greatest value in use have frequently little or no value in exchange; and on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce any thing; scarce any thing can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it." A labour theory of value can be understood as a theory that argues that economic value is determined by the amount of socially necessary labour time: this can be found in the theorization of Ricardo who said "If the quantity of labour realized in commodities, regulate their exchangeable value, every increase of the quantity of labour must augment the value of that commodity on which it is exercised, as every diminution must lower it." and Marx who said "A use-value, or useful article, therefore, has value only because human labour in the abstract has been embodied or materialised in it. How, then, is the magnitude of this value to be measured? Plainly, by the quantity of the value-creating substance, the labour, contained in the article. The quantity of labour, however, is measured by its duration, and labour-time in its turn finds its standard in weeks, days, and hours.". A subjective theory of value on the other hand derives value from subjective preferences. Carl Menger, born in Galicia and considered by Hayek as the founder of the Austrian school of economics, distinguished goods in consumption goods (first order goods) and means of production (higher-order goods). He said: Later, some market models were built using game theory, particularly regarding oligopolies, which was being developed by John von Neumann at least from 1928. Game theory was originally applied to le her and chess, both sequential games, economics as developed by Alfred Marshall on other hand, while adopting the Cartesian coordinate system, considered only static games. This may seem counterintuitive since Marshall considered that economic behavior might change in the long run and that "an equilibrium is stable; that is, the price, if displaced a little from it, will tend to return, as a pendulum oscillates about its lowest A good example of how microeconomics started to incorporate game theory, is the Stackelberg competition model published in that same year of 1934, which can be characterised as a dynamic game with a leader and a follower, and then be solved to find a Nash Equilibrium, named after John Nash who gave a very general definition of it. Von Neumann's work culminated in the 1944 book Theory of Games and Economic Behavior, which was cowriten with Oskar Morgenstern. Regarding the use of mathematics in economics, the authors had this to say: "It may be opportune to begin with some remarks concerning the nature of economic theory and to discuss briefly the question of the role which mathematics may take in its development. First let us be aware that there exists at present no universal system of economic theory and that, if one should ever be developed, it will very probably not be during our lifetime. The reason for this is simply that economics is far too difficult a science to permit its construction rapidly, especially in view of the very limited knowledge and imperfect description of the facts with which economists are dealing. Only those wlio fail to appreciate this condition are likely to attempt the construction of universal systems. Even in sciences which are far more advanced than economics, like physics, there is no universal system available at present." A major problem discussed in this book if that of rational behavior under strategic situations involving other participants: It is clear that if a model of economic activities is constructed according to these principles, the description of a game results. This is particularly striking in the formal description of markets which are after all the core of the economic system but this statement is true in all cases and without qualifications." Game theory considers very general types of payoffs, therefore Von Neumann and Morgestein defined the axioms necessary for rational behavior using utility;