Supply: Difference between revisions
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"In these examples, the units of the good have been interchangeable from the point of view of the actor. Thus, any concrete pound of butter was evaluated in this case perfectly equally with any other pound of butter. Cow A and cow B were valued equally by the individual, and it made no difference to him which cow he was faced with the choice of saving. Similarly, horse A was valued equally with horse B and with horse C, and the actor was not concerned which particular horse he had to choose. When a commodity is in such a way available in specific homogeneous units equally capable of rendering the same service to the actor, this available stock is called a supply. A supply of a good is available in specific units each perfectly substitutable for every other. The individual above had an available supply of two cows and three horses, and a supply of pounds of butter." | "In these examples, the units of the good have been interchangeable from the point of view of the actor. Thus, any concrete pound of butter was evaluated in this case perfectly equally with any other pound of butter. Cow A and cow B were valued equally by the individual, and it made no difference to him which cow he was faced with the choice of saving. Similarly, horse A was valued equally with horse B and with horse C, and the actor was not concerned which particular horse he had to choose. When a commodity is in such a way available in specific homogeneous units equally capable of rendering the same service to the actor, this available stock is called a supply. A supply of a good is available in specific units each perfectly substitutable for every other. The individual above had an available supply of two cows and three horses, and a supply of pounds of butter." | ||
What is significant for human action is not the physical property of a good, but the evaluation of the good by the actor. Physically there may be no discernible difference between one pound of butter and another, or one cow and another. But if the actor chooses to evaluate them differently, they are no longer part of the supply of the same good.<ref name="Rothbard_supply">Murray N. Rothbard. [http://mises.org/rothbard/mes/chap1b.asp#B._THE_LAW "B. The Law of Marginal Utility | What is significant for human action is not the physical property of a good, but the evaluation of the good by the actor. Physically there may be no discernible difference between one pound of butter and another, or one cow and another. But if the actor chooses to evaluate them differently, they are no longer part of the supply of the same good.<ref name="Rothbard_supply">Murray N. Rothbard. [http://mises.org/rothbard/mes/chap1b.asp#B._THE_LAW "B. The Law of Marginal Utility"], ''[[Man, Economy and State]]'', online version, referenced 2009-07-02.</ref> | ||
==References== | ==References== | ||
Revision as of 15:41, 2 July 2009
The supply of a good is defined by units that are equally serviceable, or interchangeable, from the actor’s point of view.[1]
Supply and goods
"In these examples, the units of the good have been interchangeable from the point of view of the actor. Thus, any concrete pound of butter was evaluated in this case perfectly equally with any other pound of butter. Cow A and cow B were valued equally by the individual, and it made no difference to him which cow he was faced with the choice of saving. Similarly, horse A was valued equally with horse B and with horse C, and the actor was not concerned which particular horse he had to choose. When a commodity is in such a way available in specific homogeneous units equally capable of rendering the same service to the actor, this available stock is called a supply. A supply of a good is available in specific units each perfectly substitutable for every other. The individual above had an available supply of two cows and three horses, and a supply of pounds of butter."
What is significant for human action is not the physical property of a good, but the evaluation of the good by the actor. Physically there may be no discernible difference between one pound of butter and another, or one cow and another. But if the actor chooses to evaluate them differently, they are no longer part of the supply of the same good.[2]
References
- ↑ Robert P. Murphy. "A Study Guide to Murray Rothbard's Man, Economy, and State, with Power and Market", referenced 2009-07-02.
- ↑ Murray N. Rothbard. "B. The Law of Marginal Utility", Man, Economy and State, online version, referenced 2009-07-02.
External links
- Supply and demand on Wikipedia