Question

What are the main differences between Classical and Neo-Classical Schools? Why Neo-Classical School tried to discard Classical School's Labour Theory of Value from the Liberal theory?

Answer 1

Ans.

Classical – Economists argue about the labor theory of value which means the goods and services are valued at the cost it required to manufacture them.  
In contrast the neoclassical analysis believe in the value theory , which means the value of the goods and services is more then and cost and it depends on the price buyers are willing to pay.
Neoclassical economist argue that all markets will reach equilibrium because of the free market and the price will be found for every good at which supply equals demand. All resources are used efficiently based on the principle of marginal cost equaling marginal revenue, and no involuntary unemployment of labor or capital takes place.
Neo-Classical School tried to discard Classical School's Labour Theory of Value from the Liberal theory because they believe the value to be more then the cost and they argued that marginal utility decides the value and not the labor theory of value.