Political economy

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Monograph

Identifikator:: 867647221

URN:: urn:nbn:de:zbw-retromon-93157

Document type:: Monograph

Author:: Chapman, Sydney John http://d-nb.info/gnd/123743141

Title:: Political economy

Place of publication:: London [u.a.]

Publisher:: Williams & Norgate [u.a.]

Year of publication:: 1912

Scope:: 1 Online-Ressource (255 Seiten)

Collection:: Economics Books

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44 POLITICAL ECONOMY to a common unit of expenditure. It declares that I shall so disburse my income over a given period on bread and tea and milk and clothes, that the marginal shillings laid out in acquiring each class of these things will be productive of the same utility. The truth of the law is easily established. Its proof proceeds (1) by showing that when a person’s income is expended according to the law the utility derived from it is maximised, and (2) by arguing that each individual will try to maximise the satisfaction derived from his income. People are not compelled to do the best for themselves with the means at their disposal, but in the degree in which they are reasonable will they attempt to do so and succeed in doing so. To demonstrate that the utility of income is maximised when the law of substitution is observed is a trifling task. Suppose that I so spend money on milk and bread that the last penny spent on bread yields more utility than the last penny spent on milk. In that case it would evidently be to my material well-being, other things being equal, to reduce my outlay on milk and increase my outlay on bread, because by so acting I should secure a utility larger than the one sacrificed. Gain could be reaped in this way, by transfer-

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