170

POLITICAL  ECONOMY

the  works  and  the  material  used,  or,  if  it
is  a  case  of  farming,  the  quantity  of  land
embraced  by  the  farm.  Imagine  that  an
employer  has  a  business  which  can  be  represented ­
  by  100  L.  -f  200  C.  -f  50  M.  Imagine
moreover  that  the  product  is  worth  £500  a
week,  and  that  the  following  combinations
produce  the  amounts  stated  :—
Agenta  in  production.  Product  per  Increase
week.  of  product.
100  L.-f  200  C.-f  50  M.  £500
101  L.-f  200  C.-f  50  M.  £502  3s.  £2  3s.
102  L.  +  200  C.-f  50  M.  £504  4s.  £2  Is.
103  L.-f  200  C.-f  50  M.  £506  4s.  £2  0s.
104  L.-f  200  C.-f  50  M.  £508  2s.  £l  18s.
Then  the  employer  would  try  to  increase  his
labour  to  102  men  at  least,  and  would  not
increase  it  to  more  than  103,  if  wages  were  £2
a  week,  because  up  to  102  the  gain  in  product
exceeds  the  wage  of  the  extra  man,  but  beyond
103  it  is  less  than  the  wage  of  the  extra
man  ;  and  obviously  the  employer  would  act
similarly  with  reference  to  capital  and  other
agents  in  production,  considering  what  would
be  the  effects  on  his  net  takings  of  increasing
or  reducing  each  of  them.  Finally  he  would
reach  an  arrangement  of  such  a  kind  that  the
marginal  worth  of  each  class  of  factors  in  his