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