(p. 15):An opening is made for the methods and the tests of science as soon as the force of a person's motives - not the motives themselves - can be approximately measured by the sum of money, which he will just give up in order to secure a desired satisfaction; or again by the sum which is just required to induce him to undergo a certain fatigue.
(pp. 18-19): If there are a thousand persons living in Sheffield, and another thousand in Leeds, each with about £100 a-year, and a tax of £1 is levied on all of them; we may be sure that the loss of pleasure or other injury which the tax will cause in Sheffield is of about equal importance with that which it will cause in Leeds: and anything that increased all the incomes by £1 would give command over equivalent pleasures and other benefits in the two towns.
(p. 19): But this source of error also is lessened when we are able to consider the actions and the motives of large groups of people.
(p. 24): It is then not the want of will but the want of power, that prevents economists from reckoning in the action of motives such as these; ... and it is for this reason, and not because they are not based on self-interest, that the machinery of economics cannot be brought to bear on them.
(p. 32): The laws of economics are to be compared with the laws of the tides, rather than with the simple and exact law of gravitation.
(p. 95): But although the utility, or the benefit, that is measured in the poorer man's mind by twopence is greater than that measured by it in the richer man's mind; yet if the richer man rides a hundred times in the year and the poorer man twenty times, then the utility of the hundredth ride which the richer man is only just induced to take is measured to him by twopence; and the utility of the twentieth ride which the poorer man is only just induced to take is measured to him by twopence. For each of them the marginal utility is measured by twopence; but this marginal utility is greater in the case of the poorer man than in that of the richer.
(p. 100): The price will measure the marginal utility of the commodity to each purchaser individually: we cannot speak of price as measuring marginal utility in general, because the wants and circumstances of different people are different.
(p. 110): In all these cases there is great difficulty in allowing for the time that elapses between the economic cause and its effect. Explain the problem.
(p. 111): Another difficulty of the same kind arises from the fact that there are many purchases which can easily be put off for a short time, but not for a long time.
p. 117: If a person has a thing which he can put to several uses, he will distribute it among these uses in such a way that it has the same marginal utility in all.
(p. 118): And in a money-economy, good management is shown by so adjusting the margins of suspense on each line of expenditure that the marginal utility of a shilling's worth of goods on each line shall be the same.
(p. 121): And therefore, even though we know the rate at which he discounts future pleasurable events, such as spending £1 on immediate gratifications, we yet do not know the rate at which he discounts future pleasures.
ket, by the aggregate of the sums by which the prices shown in a complete list of demand prices for tea exceeds its selling price.
(p. 132): The substance of our argument would not be affected if we took account of the fact that, the more a person spends on anything the less power he retains of purchasing more of it or of other things, and the greater is the value of money to him (in the technical language every fresh expenditure increases the marginal value of money to him). But though its substance would not be altered, its form would be made more intricate without any corresponding gain; for there are very few practical problems, in which the corrections to be made under this head would be of any importance. There are however some exceptions. ...
(pp. 154-5): The exertions of all the different kinds of labour that are directly or indirectly involved in making it; together with the abstinences or rather the waitings required for saving the capital used in making it: all these efforts and sacrifices together will be called the real cost of production of the commodity. The sums of money that have to be paid for these efforts and sacrifices will be called either its money cost of production, or, for shortness, its expenses of production; they are the prices which have to be paid in order to call forth an adequate supply of the efforts and waitings that are required for making it; or, in other words, they are its supply price.
What is the difference and why does it matter?
(p. 164): We might as reasonably dispute whether it is the upper or the under blade of a pair of scissors that cuts a piece of paper, as whether value is governed by utility or cost of production.
(p. 165): Thus we may conclude that, as a general rule, the shorter the period which we are considering, the greater must be the share of our attention which is given to the influence of demand on value; and the longer the period, the more important will be the influence of cost of production on value.
(p. 166): When considering costs from the point of view of the capitalist employer, we of course measure them in money ... . But when considering costs from the social point of view, ... then we are concerned with the real costs of efforts of various qualities, and with the real cost of waiting.
(p. 221): and on that margin the net efficiency of either in adding to the money value of the total product will be proportionate to the cost of applying it.
(p. 221): In other words, the wages of skilled and unskilled labour will bear to one another the same ratio that their efficiencies do at the margin of indifference.
(p. 222): He endeavours to employ each agent up to that margin at which its net product would no longer exceed the price he would have to pay for it.
(p. 226): ... many able writers have supposed that it represents the marginal use of a thing as governing the value of the whole. It is not so; the doctrine says we must go to the margin to study the action of those forces which govern the value of the whole: and that is a very different affair.
(p. 227): But marginal uses do not govern value; because they, together with value, are themselves governed by those general relations.
(p. 233): and to say that the purchaser expected normal interest on the price which represented the capitalized value of the services, would be a circular statement that the value of the services rendered by stones is governed by the value of those very services.
(p. 237): Thus our central doctrine is that interest on free capital and quasi-rent on an old investment of capital shade into one another gradually; even the rent of land being not a thing by itself, but the leading species of a large genus.
(p. 271): Here there is to be noted an important difference between demand and supply. A fall in the price, at which a commodity is offered, acts on demand always in one direction. ...
But there are no such simple rules with regard to supply.
(p. 281): But even there the policy is apt to be wrenched from its proper uses, to the enrichment of particular interests: for those industries which can send the greatest number of votes to the poll, are those which are already on so large a scale, that a further increase would bring very few new economies.
(p. 285): For on that part of the consumption which existed before the bounty, consumers' surplus is increased by just the amount of the bounty; while on the new consumption that is caused by the bounty, the gain of the consumers' surplus is less than the bounty.
(p. 290): It is clear that if he spends his income in such a way as to increase the demand for the services of the poor and to increase their incomes, he adds something more to the total happiness than if he adds an equal amount to the incomes of the rich,
(p. 291): and secondly, that it might even be for the advantage of the community that the government should levy taxes on commodities which obey the law of diminishing return, and devote part of the proceeds to bounties on commodities which obey the law of increasing return.
My Home Page