58

ECONOMIC PRINCIPLES

enquiry when any of the components has few or no uses
except in the combination.
A simplification of the problem is possible in such a
case as that of the knife. The part of the value of knife
and handle which may be assigned to the blade, so far as
its material is concerned, is sufficiently definite apart from
variations in demand for knives. The uses of steel are so
many and various, that the demand for steel is only affected
in a quite insignificant degree by the greater or less amount
of it needed for knife-blades. The value of the steel of the
blade may be said to correspond to the marginal utility of
steel in its multifarious uses. Hence, the marginal utility
of the knife being ascertained, the deduction of the value
of the steel gives the marginal utility of the handle and
workmanship. If it be desired to proceed further, the
workmanship may be similarly treated to the steel, and a
residue obtained of marginal utilities, corresponding to
different amounts of supply, which represents the effective
demand for handles. As, in some cases at any rate, the
demand for the purpose of forming knife-handles constitutes
a large part of the demand for the material used for that
purpose, it is important to ascertain how the demand and
supply of such material stands. The solution offered is only
approximate, since it assumes that the variations in the
volume of the demand for knives are entirely without effect
on the marginal utility for all purposes of the constituents
other than the handle.
The more general treatment of the problem is on lines
corresponding to what was done for the second point of view
of joint products, The joint demand for malt and hops, for
example, as united in beer, may be satisfied by different
combinations of the two constituents named. When the
most advantageous combination has been determined by a
brewer, that is, the proportions which yield the most profitable
 results, these proportions admit of variation, and, for
small variations, economies on the side of expenses will be
balanced, but not outweighed, by losses on the side of sales,
Thus the marginal utility of each constituent admits of
separate examination.