FRR

 

 

 

 

14 NATURE OF CAPITAL AND INCOME [CHae. I

or “subjective value’). It seems preferable to conform
our definitions of value and price as closely as possible to
business usage, which instinctively and consistently applies
the term “ price’’ to the unit and “value” to the aggregate.

§7

The distinction between quantity, price, and value of
wealth may be seen clearly in any “inventory,” such as the
following : —

 

 

 

 

Soin PRICE IN VALUE IN
QUANTITY WHEAT WHEAT
Shoes... os 0 1000:pair 41 bu. per pair 4,250 bu.
Baal. oo oi, oad 300bs, bu. per lb. 60 bu.
Dwelling House . . . | 1house | 10,000 bu. per house | 10,000 bu.
Wheat... = 4 100 bu. 1 bu. per bu. 100 bu.
14,410 bu.

 

 

 

 

 

In the first column are recorded various quantities
of wealth, measured each in its own special unit ; in the second
 column are the prices of these in wheat; while in the
last column are their values, also in terms of wheat. The
first and last columns represent two different modes of measuring
 wealth. Statistics of wealth, such as those published
monthly by the Department of Commerce, usually give
both “quantities” and “values.” To translate from one
to the other we need always a price as go-between.
It is important not to confuse the three columns with
each other. The quantity of beef is a totally different thing
from its value, and each of these is different from its price.
The quantity is measured in pounds of beef, its value in
bushels of wheat, and its price in bushels per pound. These
three magnitudes are all of different “dimensions.” Both
quantity and value are simply physical magnitudes.
“Value” as here explained is not a subjective magnitude

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TERE