Economic Principles - An Introductory Study (1904) (Hardcover)

Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: CHAPTER II DEMAND AND VALUE interest of modern economics centres about the J problem of value. What are the fundamental causes of value in commodities ? Why is the value of one commodity great, that of another small ? How can changes in the value of a commodity be explained ? The answers to these questions will provide us with the key to the distribution of wealth among the classes of persons whose co-operation is necessary for its production. The consumer is guided in his selection of goods for his use by a consideration of the values which he finds placed on the different goods that can serve his ends. His judgment of the comparative relation, of the serviceability of the goods for those ends, and the values of those goods, must affect his choice of goods for consumption, if that choice is made deliberately and intelligently. If it be made as the result of habit, the habit reflects, in all probability, a comparison of this kind, either by the consumer himself, or by the class or community to which he belongs, though the habit may persist when changes in value, or in the serviceability of commodities, have created a situation which would no longer justify the deliberate selection of the goods as means to achieve the ends in view. The producer, too, is under the control of the values of commodities. He will desire to direct his efforts so as to realise as great a value for his produce as possible. In selecting the goods to produce, and the means of production to be employed, attention must constantly be given to the amount of value which his output may be expected to have, and to the amounts of the values of the goods and services which must be consumed in its production. With an isolated individual, or self-contained household, the aspect of value which influences a...