The Principles of Economics, with Applications to Practical ProblemsFetter, Frank A. (Frank Albert)
General
The Principles of Economics, with Applications to Practical Problems
Fetter, Frank A. (Frank Albert)
Economics
If there is but one grade of agent, it is, of course, valued without
reference to any lower grade. The effect of the presence of lower grades
of agents is to lower the value of the higher, inasmuch as the lower
grades are substituted for the higher. There may be at first enough of
the higher grade of agents to produce all the fruit wanted of the better
quality. If, then, there is an increasing demand, and the additional
yield can be secured only with greater effort, the value of the product
will rise. The presence of poorer grades, however, checks that rise,
because use can be shifted to them. The value of grade one is not high
because grades two, three, and four, which are worse than it, are
available, but because they are not of better quality than they are.
Poor as they are, their presence reduces somewhat the intensity of
demand for the best grade. Indirect agents, therefore, are seen to be
subject to just the same comparisons, substitutions, and estimates, when
their value is considered, as are direct consumption goods.
[Sidenote: Differential advantage of agents in the amount of their
products]
2. _The rents of two agents differ as do the quantities of goods yielded
by them, other things being equal._ In the case just considered, the
quantity remained the same while the quality differed; now is to be
considered the case where the quantity differs while the quality remains
the same. It is possible that one grade of agents is "poorer" because it
produces less fruit, not fruit of poorer quality. Consider first the
static problem. If both agents yield fruits exactly alike, the value of
equal units at the same place and time must be equal, and the usufructs
would vary in just proportion with the quantity of product. Now consider
the dynamic problem. If the desire for that fruit increases, rent would
grow as scarcity became more felt. The agents yielding, under the
prevailing conditions, the largest product, would first be used; later,
the poorer agents. The possibility of resorting to the poorer agents
would keep the better from rising so high.
[Illustration: _Grades of Agents by amount of Product of Uniform
Quality_]
[Sidenote: Complementary agents unite to form a product]
Public-domain text, read in full here on John Shaqi.
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