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Author Topic:   Economics: How much is something worth?
Straggler
Member
Posts: 10333
From: London England
Joined: 09-30-2006


(1)
Message 271 of 330 (664160)
05-29-2012 2:36 PM
Reply to: Message 262 by Percy
05-28-2012 3:19 PM


Re: Price And Value
In your latest reply you seem intent on misunderstanding me. And you have already accused me (amongst others) of seeking to misrepresent you. So things are in danger of just getting silly here.
Percy writes:
I was referring to your characterization of accounting as biased. You said it overemphasized the contributions of ownership to wealth creation when the reality is that ownership gets only a few lines on the accounting sheets.
How many lines it gets is irrelevant. What I am talking about by accounting bias and over-emphasis on ownership is this:
Percy writes:
Try to find a place on an income statement for this scientist's contribution to national productivity.
And this:
Percy writes:
If the worker wants to participate in his company's contribution to wealth creation then he should buy stock.Message 352
You won't find the this scientist's contribution to national productivity in any way that meaningfully reflects the actual value of his contribution (the discovery/invention of a transformative technology that results in a tenfold increase in national productivity let us not forget) on any income statement. That is the point. His value to the economy is not reflected in your balance-sheet-definition of "value"
Likewise you won't find the economic value of having an educated, rather than an uneducated, workforce on any income statement.
Nor will you find the economic value of unpaid work to the economy showing up on any such statement.
All of these things have economic value. Yet all will simply appear as increased productivity and the proceeds of this increased productivity (i.e. increased profits) will show as belonging to share owners of the companies that benefit from this increased productivity.
In short the necessities of accounting reward ownership and largely ignore the contributions made by those whose contribution is made up of innovation, knowledge, skills etc. Because accounting can quantify ownership. And it can quantify profit. But it cannot so easily quantify the economic value of innovation or knowledge.
Hence the accounting based approach you are taking gives a warped view of economic value and unduly rewards ownership above other, arguably more significant, contributory factors to wealth creation.
Percy writes:
If the worker wants to participate in his company's contribution to wealth creation then he should buy stock. Message 352
Straggler writes:
Why that rather than work in R&D on a productivity boosting technology?
Percy writes:
Why not both?
Because that would confuse the example which is designed to explicitly find out whether you are unduly putting the emphasis on ownership or not.
Straggler writes:
Many companies have employee stock plans.
Let's say that our R&D scientist isn't too financially astute. A scientific genius who is a bit of an absent minded professor type. Finding matching socks in the morning is a challenge so all that money stuff is just a distraction from unlocking the secrets of the universe that he is really interested in.
Let's also say that the boss of our R&D scientist is a bit of a cad. He spends most of is time shirking and taking credit for the successes of his team. But he is not without some intelligence. He recognises the potential of the work our absent minded genius is close to completing. He buys shares. As it becomes increasingly obvious that the work will be not only succesfful but transformative he buys all the shares he can get his hands on.
The work is revolutionary. The transformative effect on the company profits and the national economy as a whole are immense. The boss makes a mint. Our R&D scientist continues to pick up his 70,000 dollar a year pay cheque.
Which of these two do you think is best described as a "wealth creator"....? Which of these two would you consider to have added more value to the national economy?
To me it is utterly obvious that the scientist has provided more economic value. And that this has very little to do with his income. Do you agree?

This message is a reply to:
 Message 262 by Percy, posted 05-28-2012 3:19 PM Percy has replied

Replies to this message:
 Message 272 by Percy, posted 05-30-2012 7:11 AM Straggler has not replied
 Message 316 by Percy, posted 06-02-2012 2:41 PM Straggler has replied

  
Percy
Member
Posts: 22392
From: New Hampshire
Joined: 12-23-2000
Member Rating: 5.3


Message 272 of 330 (664235)
05-30-2012 7:11 AM
Reply to: Message 271 by Straggler
05-29-2012 2:36 PM


Re: Price And Value
Straggler writes:
In your latest reply you seem intent on misunderstanding me. And you have already accused me (amongst others) of seeking to misrepresent you. So things are in danger of just getting silly here.
So do you think it's time to call it?
--Percy

This message is a reply to:
 Message 271 by Straggler, posted 05-29-2012 2:36 PM Straggler has not replied

  
xongsmith
Member
Posts: 2578
From: massachusetts US
Joined: 01-01-2009
Member Rating: 6.8


Message 273 of 330 (664253)
05-30-2012 1:21 PM
Reply to: Message 251 by Percy
05-28-2012 9:20 AM


Re: The Value of Air in Trade
Percy writes:
Actual value in this sense plays no role in anything I'm saying, and I don't view actual value as a useful concept, or at least I can't think of a context where I would find it useful.
And the fact that this is a widely-held problem is, indeed, a great tragedy for homo sapiens sapiens.....
Actual value might be the most important thing of all, but so many appear to be ignoring it.

- xongsmith, 5.7d

This message is a reply to:
 Message 251 by Percy, posted 05-28-2012 9:20 AM Percy has replied

Replies to this message:
 Message 275 by Percy, posted 05-30-2012 7:14 PM xongsmith has replied

  
Percy
Member
Posts: 22392
From: New Hampshire
Joined: 12-23-2000
Member Rating: 5.3


Message 274 of 330 (664278)
05-30-2012 7:07 PM
Reply to: Message 265 by Jon
05-28-2012 5:53 PM


Re: Price And Value
Jon writes:
Jon writes:
10 years and no loan yields nothing, 10 years and a loan yields a million dollars.
But if the inputs were simply freely available for all to take, then no loan would be necessary.
Uh, okay. Do you live on this planet?
Of course I do. What's your point?
Where on this planet are things "freely available for all to take?"
Jon writes:
A product of the current capitalist system you so greatly revere.
Well, like I said once before, if I'm talking to communists then please let me know so I can stop wasting my time.
You're talking to people about economics. And if your theories about economic value truly are about economic value then they should be applicable to any economic system imaginablenot just Capitalism.
My descriptions of the relationship between price and value are in the context of capitalism. I can tell you're not a fan of capitalism from your comments:
The investor didn't create wealth; he just set up a situation where he could siphon off wealth created by someone else.
...
Thus the only role filled by owners and investors is that of hijacker: they hold hostage the resources that real wealth creators use to create wealth.
But I'm not trying to get you to like capitalism - I'm just explaining how it works. In the end it's fine with me if you still believe capitalism is evil, I don't care. I'm not trying to get you to like it, just understand it.
If capital had not been available in the form of a loan, then the farmer would not have been able to obtain a loan for the purchase of the land and two things would not have happened:
  1. The land would not have been farmed and would have lain idle.
  2. The farmer would not have increased his wealth by $311,000 over 10 years.
--Percy
Edited by Percy, : Grammar.

This message is a reply to:
 Message 265 by Jon, posted 05-28-2012 5:53 PM Jon has replied

Replies to this message:
 Message 278 by Jon, posted 05-31-2012 7:08 AM Percy has replied

  
Percy
Member
Posts: 22392
From: New Hampshire
Joined: 12-23-2000
Member Rating: 5.3


Message 275 of 330 (664279)
05-30-2012 7:14 PM
Reply to: Message 273 by xongsmith
05-30-2012 1:21 PM


Re: The Value of Air in Trade
You sound like a creationist declaring that science is wrong because it rules out God.
Mainstream economics doesn't rule out concepts like actual value or inherent value. Different ways of thinking about economics have different concepts of value. Actual and inherent value are concepts of different systems of economic thought than neoclassical economics. Just as when I argue for evolution I am not implying anything about the existence of God, when I describe how capitalism and mainstream economics works I am not implying anything about other economic systems. Naturally I have opinions about them, but they are not what we're discussing.
--Percy

This message is a reply to:
 Message 273 by xongsmith, posted 05-30-2012 1:21 PM xongsmith has replied

Replies to this message:
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Percy
Member
Posts: 22392
From: New Hampshire
Joined: 12-23-2000
Member Rating: 5.3


Message 276 of 330 (664284)
05-30-2012 8:13 PM
Reply to: Message 264 by Jon
05-28-2012 5:30 PM


Re: The Value of Air in Trade
Jon writes:
No. I'm claiming that 'value in trade' is a pointless synonym for 'price' and that 'value in use' is what actually determines a consumer's willingness to pay, which in turn sets the demand curve and is thus behind an entire one half of the puzzle in determining market price of a good or service.
But value in use assigns an infinite value to air, and to any nutrient essential to human survival such as calcium, iron and vitamin C. An infinite value in use of vitamin C is useless for determining the market price, which happens to be a few cents per milligram, not infinity.
About the price/value ratio, I originally typed a few paragraphs trying to explain it again, but having done that I realized it mostly works against me because it is somehow giving you a false impression of how I think of value. Just forget the value/price ratio and let's try again.
Price and value are related to one another. Price affects people's sense of value which in turn affects price which in turn affects people's sense of value, and so forth. It's a feedback loop. The higher the price relative to a person's internal valuation for a good, the less of that good the person will buy. Conversely, the lower the price relative to a person's internal valuation for a good, the more of that good the person will buy. And sales volume gives merchants a sense of the public's valuation of a good relative to the price at which it's being offered, and this sense of the public's valuation causes them to adjust their prices.
  • First, value determines willingness to pay (WTP), willingness to pay determines how much a firm can charge for its goods or services. If people are only willing to pay $X, then the firm cannot charge $X+1. Value sets price. Not the other way around.
Yes, exactly right, up until the last two sentences. Value not only influences price, price also influences value. They influence each other. You might think the value of a bag of peas is $1.00, but after a year of never finding a price below a $1.10 you would adjust your sense of the value of peas accordingly. If this weren't true I would still think a candy bar was worth 5¢.
  • Second, price gives us an at least figure for WTP; if people pay $X for an item then their WTP is at least $X, though they may be willing to pay more. Thus price can serve to help measure value, but it is not the same thing as value and it does not determine value. It indicates minimum value, but that's about it.
Again, price and value influence one another. What we see in the range of prices available influences our valuation of what something is worth, and what merchants see in terms of sales at a given price point influences their sense of how customers are valuing the good which in turn influences their setting of prices.
--Percy
Edited by Percy, : Spelling.
Edited by Percy, : Missing dBCode.

This message is a reply to:
 Message 264 by Jon, posted 05-28-2012 5:30 PM Jon has replied

Replies to this message:
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Dr Adequate
Member (Idle past 284 days)
Posts: 16113
Joined: 07-20-2006


(1)
Message 277 of 330 (664304)
05-30-2012 10:04 PM
Reply to: Message 276 by Percy
05-30-2012 8:13 PM


Re: The Value of Air in Trade
But value in use assigns an infinite value to air, and to any nutrient essential to human survival such as calcium, iron and vitamin C. An infinite value in use of vitamin C is useless for determining the market price, which happens to be a few cents per milligram, not infinity.
Hence the idea of marginal value which lies at the heart of neoclassical economics. Oxygen is of great value to me; more oxygen than I have is not.

This message is a reply to:
 Message 276 by Percy, posted 05-30-2012 8:13 PM Percy has seen this message but not replied

  
Jon
Inactive Member


Message 278 of 330 (664334)
05-31-2012 7:08 AM
Reply to: Message 274 by Percy
05-30-2012 7:07 PM


Re: Price And Value
Where on this planet are things "freely available for all to take?"
You're joking, right? At least one such resource has been discussed extensively in this thread already. And there are many more. Depending on where you live: water, wildlife, wood, stone, sunlight.
My descriptions of the relationship between price and value are in the context of capitalism.
No they aren't. Because even in the context of capitalism, price and value are not related the way you describe. The 'value' you are talking about has no meaningful reason for existing as a concept since it is nothing more than 'average price'; and the 'value' you claim is not relevant ('value in use') is actually what determines the nature of the demand curve.
I'm just explaining how it works.
No you aren't. You're just using clever math tricks to come up with some way to explain 'price' and 'value' as not being the same thing, even though you ended up just turning 'value' into 'average price'. No one here is buying that this is some basic function of how Capitalism works, because it isn't.
If capital had not been available in the form of a loan, then the farmer would not have been able to obtain a loan for the purchase of the land and two things would not have happened:
1. The land would not have been farmed and would have lain idle.
2. The farmer would not have increased his wealth by $311,000 over 10 years.
If all you want to talk about is Capitalism and why it is so wonderful, then why did you start a thread falsely claiming that you wanted to talk about economics? Not that your descriptions of 'price' and 'value' are any more accurate in the context of Capitalism than in the context of economics in general, but at least then we would have all known that you're not really serious about discussing the topic in realistic terms.
Jon

Love your enemies!

This message is a reply to:
 Message 274 by Percy, posted 05-30-2012 7:07 PM Percy has replied

Replies to this message:
 Message 279 by Percy, posted 05-31-2012 8:58 AM Jon has replied

  
Percy
Member
Posts: 22392
From: New Hampshire
Joined: 12-23-2000
Member Rating: 5.3


Message 279 of 330 (664335)
05-31-2012 8:58 AM
Reply to: Message 278 by Jon
05-31-2012 7:08 AM


Re: Price And Value
Jon writes:
Where on this planet are things "freely available for all to take?"
You're joking, right? At least one such resource has been discussed extensively in this thread already. And there are many more. Depending on where you live: water, wildlife, wood, stone, sunlight.
The example you were responding to was of an immigrant from Brazil starting up an office cleaning business with the assistance of a loan. The free things you mention aren't even remotely relevant to starting the business, and only one of them is really free anyway (sunlight). But even if they were all free, in order for your response to make sense you must explain how free water, wildlife, wood, stone and sunlight can take the place of the loan our immigrant needs to start up her cleaning business.
The availability of capital in the form of loans allows people to better leverage their labor by enabling them to marshal resources in the pursuit of making money, i.e., creating wealth. Instead of working at a job for a relatively fixed salary people can work at building a business, thereby creating wealth on a grander scale.
No you aren't. You're just using clever math tricks to come up with some way to explain 'price' and 'value' as not being the same thing, even though you ended up just turning 'value' into 'average price'.
Value is not 'average price'. While explaining the mainstream economic view of value and price to Crash I described how merchants might use an average weighted by sales volume (rather than by supermarket) to get a sense for how consumers value a good in their area. It's a rough measurement tool, not a definition.
You're right that capitalism isn't the topic, but creating wealth (creating value) is part of capitalism, and that's what Straggler wants to talk about (this subthread began when you replied to one of my responses to Straggler). I have no objections to talking about creating value, since value is this thread's topic, though it is value in a different sense then I intended when I began the thread. When talking about value and price, value is the subjective sense of consumers of how much something is worth. But when talking about creating value then this is the kind of value that is subject to the value added tax and that contributes to profits and so forth, and it is represented by objective numbers that can be written down in accounting ledgers.
We got off on the topic of capitalism when you asked (back in Message 261), "So what value does ownership actually add to a resource? To a finished product?" and then provided the example of the two farmers, so I gave you the answer that over 10 years the farmer creates $311,000 in value that did not previously exist, and all because capital was available in the form of a loan. You responded with criticisms of capitalism, but I don't care if you like capitalism or not. I'm just hoping you'll understand it.
--Percy

This message is a reply to:
 Message 278 by Jon, posted 05-31-2012 7:08 AM Jon has replied

Replies to this message:
 Message 281 by Jon, posted 05-31-2012 9:52 AM Percy has replied
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Jon
Inactive Member


Message 280 of 330 (664340)
05-31-2012 9:23 AM
Reply to: Message 276 by Percy
05-30-2012 8:13 PM


Re: The Value of Air in Trade
The higher the price relative to a person's internal valuation for a good, the less of that good the person will buy.
What you're describing here is the classical demand curve.
And sales volume gives merchants a sense of the public's valuation of a good relative to the price at which it's being offered, and this sense of the public's valuation causes them to adjust their prices.
Yes, amount sold and selling price are all good indicators of the value people place on various resources, goods, and services.
But all this sense is contradicted when you say goofy things like:
Price affects people's sense of value ...
In general, people don't place value on resources, goods, or services based on the price charged for them.1 If ramen noodles went up in price to $1000 per package, then according to you poor people should suddenly view a package of ramen noodles as having the same value as their used cars and try their hardest to own at least one. Yet that's not what happens: poor people don't suddenly value ramen noodles more; and they don't try to buy a package of ramen noodles. They already know the value of a package of ramen noodles independent of its price and they know that they do not get $1000 worth of value from a package of ramen noodles because their value of ramen noodles didn't change when the price went up (that is, they still only get 20 worth of value from the ramen noodles, and that is why they will not pay $1000 for them).
Value not only influences price, price also influences value.
This is not true for most goods (see footnote), and even for those goods that it is true for, selling price and value are still two completely different things. One is represented as the intersection of the demand and supply curves; the other is the demand curve.
but after a year of never finding a price below a $1.10 you would adjust your sense of the value of peas accordingly.
No I wouldn't. I'd just accept that if I want peas I have to pay $1.10 for them, which I would only do, strange as it might seem to you, if I already valued peas at more than $1.10/bag. Of course, just because I value a bag of peas at at least $1.10/bag doesn't mean I wouldn't still try in vain to find bags of peas at $1.00, just like people who place an infinite value on air still prefer to buy it where they can get it the cheapestoutside.
If this weren't true I would still think a candy bar was worth 5.
The reason you think a candy bar is worth more than 5 is because you make more money than you used to. Remember, dollars are only a common unit of measurement for resources, goods, and services. You cannot say that your value of a candybar has changed over the years just because you are now willing to pay more for one. You can only say that a candybar is more valuable to you now than it was in the past if the amount you are willing to pay for that candybar equates to you giving up more goods and services elsewhere than you would have in the past. But If 5 bought a loaf of bread and a candybar in the past, and $1 buys a loaf of bread and a candybar today, and you find that these represent your past and current willingness to pay for these items, then it would be true that a candybar has not increased in value for you at all, since you are still only willing to give up the same amount of stuff to get one.
Again, price and value influence one another. What we see in the range of prices available influences our valuation of what something is worth,
See footnote. This is not true for most goods and services. The way to change value is to change how individuals view the utility of a good or service. Even when you include luxury and status goods, the high price is still being used by the consumer to form their view of the item's utility (e.g., a more expensive car has more utility to someone has a symbol of their success than a cheaper one would). And this is only true of luxury and status goods, which are the minority of things consumed.
what merchants see in terms of sales at a given price point influences their sense of how customers are valuing the good which in turn influences their setting of prices.
And this is true; but it's completely disconnected from the other things you've been saying.
Jon
__________
1 An exception might be luxury and status goods, as part of the desire people have for these items is driven by how unattainable the price makes them to everyone else. But even in this case, selling price and value are two separate things.

Love your enemies!

This message is a reply to:
 Message 276 by Percy, posted 05-30-2012 8:13 PM Percy has replied

Replies to this message:
 Message 283 by Percy, posted 05-31-2012 2:58 PM Jon has replied

  
Jon
Inactive Member


Message 281 of 330 (664342)
05-31-2012 9:52 AM
Reply to: Message 279 by Percy
05-31-2012 8:58 AM


Re: Price And Value
The example you were responding to was of an immigrant from Brazil starting up an office cleaning business with the assistance of a loan. The free things you mention aren't even remotely relevant to starting the business, and only one of them is really free anyway (sunlight). But even if they were all free, in order for your response to make sense you must explain how free water, wildlife, wood, stone and sunlight can take the place of the loan our immigrant needs to start up her cleaning business.
The availability of capital in the form of loans allows people to better leverage their labor by enabling them to marshal resources in the pursuit of making money, i.e., creating wealth. Instead of working at a job for a relatively fixed salary people can work at building a business, thereby creating wealth on a grander scale.
You're missing my point. Whether the producer gets his inputs for free or by purchasing them from someone else, the value of the items he produces will be the same and he will generate the same amount of income for his business either way.
The only difference is that when the inputs are free, he keeps all the income. When the inputs aren't free, he gives up some of his income to whomever he has to buy the inputs from. Either way: same amount of wealth created.
You seem to think that just because there are more people getting their hands on the wealth that there is somehow more wealth, and that the people who get most of the wealth are somehow the most responsible for creating it in the first place.
Both these ideas are wrong.
Value is not 'average price'.
I know. But then again, I'm not the one claiming it is. You are the one who came up with a silly little table in which you calculated the average price paid for peas at different grocery stores and called that the 'value' of a bag of peas.
I described how merchants might use an average weighted by sales volume (rather than by supermarket) to get a sense for how consumers value a good in their area.
I don't think anyone has ever disagreed that selling price can be used as a means of judging people's value of goods or services. What has been disagreed with is that price sets value, which it doesn't.
I gave you the answer that over 10 years the farmer creates $311,000 in value that did not previously exist, and all because capital was available in the form of a loan.
But both farms generated the same wealth. You cannot say that the first farm generated more wealth than the second just because that wealth was shared with more people! Nor can you say that the banker was somehow responsible for the creation of any of that wealth when it is clear as day that the amount of wealth created is identical with or without him!
You responded with criticisms of capitalism, but I don't care if you like capitalism or not. I'm just hoping you'll understand it.
I'm criticizing nothing. I'm explaining what is actually happening. You're explaining the same thing.
The conclusions you're drawing and trying to support with that explanation are just ridiculous, though.
Jon

Love your enemies!

This message is a reply to:
 Message 279 by Percy, posted 05-31-2012 8:58 AM Percy has replied

Replies to this message:
 Message 287 by Percy, posted 06-01-2012 8:02 AM Jon has replied

  
Dr Adequate
Member (Idle past 284 days)
Posts: 16113
Joined: 07-20-2006


Message 282 of 330 (664359)
05-31-2012 12:05 PM
Reply to: Message 279 by Percy
05-31-2012 8:58 AM


Re: Price And Value
But when talking about creating value then this is the kind of value that is subject to the value added tax ...
So when we're talking about creating value, then value is price?
Or not?
Really, you start a thread on "how much is something worth", and yet it has been very hard to get any sort of operational definition out of you.

This message is a reply to:
 Message 279 by Percy, posted 05-31-2012 8:58 AM Percy has seen this message but not replied

  
Percy
Member
Posts: 22392
From: New Hampshire
Joined: 12-23-2000
Member Rating: 5.3


Message 283 of 330 (664387)
05-31-2012 2:58 PM
Reply to: Message 280 by Jon
05-31-2012 9:23 AM


Re: The Value of Air in Trade
Jon writes:
This is not true for most goods (see footnote), and even for those goods that it is true for, selling price and value are still two completely different things.
Since both price and value are denominated in currency I don't think I could agree that they're "two completely different things," but as I've been saying throughout this thread, they're not the same thing.
One is represented as the intersection of the demand and supply curves; the other is the demand curve.
This is pretty much what I said to Crash. The graph I used to illustrate the effect of price on demand was this one:
The demand curve is in part a reflection of the wide array of values people place on the same good.
About the rest of your message, I like the way you're talking about value and price. It sounds pretty much like mainstream economics and I see no reason to quibble with it. There are still areas where we disagree, such as how people's perception of value changes, but it doesn't seem worth arguing about.
--Percy

This message is a reply to:
 Message 280 by Jon, posted 05-31-2012 9:23 AM Jon has replied

Replies to this message:
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Dr Adequate
Member (Idle past 284 days)
Posts: 16113
Joined: 07-20-2006


Message 284 of 330 (664393)
05-31-2012 3:26 PM
Reply to: Message 283 by Percy
05-31-2012 2:58 PM


Re: The Value of Air in Trade
Since both price and value are denominated in currency I don't think I could agree that they're "two completely different things,"
Just as you wouldn't say that the mass of a hamburger and the mass of Jupiter are completely different things? After all, they can both be denominated in tonnes.
... but as I've been saying throughout this thread, they're not the same thing.
That is not exactly what you've been "saying throughout this thread". But let's let that pass.
What are you saying? Let's overlook the times that you've said things that you later maintained that you're not saying. What would you in fact like to say?
Edited by Dr Adequate, : No reason given.

This message is a reply to:
 Message 283 by Percy, posted 05-31-2012 2:58 PM Percy has seen this message but not replied

  
Jon
Inactive Member


Message 285 of 330 (664398)
05-31-2012 3:41 PM
Reply to: Message 283 by Percy
05-31-2012 2:58 PM


Re: The Value of Air in Trade
Since both price and value are denominated in currency I don't think I could agree that they're "two completely different things,"
It's economics. Everything gets denominated in currency. We've already seen that we can think of air in terms of how many dollars it is worth to people ($∞). We can do the same with a pile of shit as well ($0).
But that doesn't mean there is any other relationship between a pile of shit and fresh air.
Price and value are not the same. It's true that they are related and can impact one another, but not in the way you keep insisting where they are almost identical. They are much more different from one another than you keep making them out to be.
This is pretty much what I said to Crash. The graph I used to illustrate the effect of price on demand was this one:
But that's bass ackwards. Demand affects selling price, not the other way around. If a person is willing to pay $38 for a single widget, then you can charge them that much for that widget. If they are willing to pay $64 for two widgets, then you can charge them that much for two widgets. Willingness to pay (value) determines selling price. People take price into consideration when determining how much of a good or service to consume, not in determining how much of a good or service to demand.
The demand curve is in part a reflection of the wide array of values people place on the same good.
No. The demand curve is the value people place on a good.
Jon

Love your enemies!

This message is a reply to:
 Message 283 by Percy, posted 05-31-2012 2:58 PM Percy has seen this message but not replied

  
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