Introduction Economically relevant valuations are determined by the significance of the last unit added to or subtracted from the total. Marginalism plays an important role in the development of market prices. In an economic exchange, each additional item has less value than the preceding unit. This means that when a seller offers a number of … Continue reading Marginalism

Introduction Choosing one possible use means sacrificing other possible uses. When buying a horse, one should always take the time to look at its teeth. Teeth tell a lot about the health and age of a horse. In this post, however, we're going to look at the rump of this horse. When an economic actor … Continue reading Opportunity Costs

Introduction “Subjective valuations of goods and services determine the demand for them; in turn, consumers determine types of goods, quantities, and prices.” Author Unknown The scale of tastes and preferences provides the only measure for economic value. If the subjective judgments of individuals determine all economic value, how do we measure relative values? If you … Continue reading Tastes and Preferences

Introduction In yesterday’s post, I introduced the fundamental principle that only individuals act. This principle applies always and everywhere, no matter where the individual exists or in what activity they are engaged. In today’s post, I will address the source of value upon which these actions are based. Body Economic theory — from all schools … Continue reading Methodological Subjectivism

Many years ago, someone I knew changed lanes on the highway when the traffic ahead slowed suddenly. He then ran into the back of a car in the other lane. When he recounted the incident to me, he said it was not his fault. He became angry with me when I pointed out that he … Continue reading There is No Blame

The country we call Iran has presented one big problem for the U.S. for nearly 5 decades. One president after another has proposed or implemented solutions to what they define as “the problem.” They usually focus on preventing Iran from obtaining nuclear weapons. But, does the possession of nuclear weapons represent the entirety of the … Continue reading Dividing an Elephant

Try to explain to a five-year-old that he cannot have a pretty cake and eat it at the same time too. Or, explain to the increasing number of socialists that they cannot have all the “free stuff” before they make their own contribution to that stuff. You can have your cake “You can have your … Continue reading Have Your Cake