The foundations of measurement and modeling in economics

A detailed analysis of the behavior of economic agents shows that they always know how to find a means of measuring the value of goods exchanged, through prices, which each designate the quantity of value represented by this measuring instrument to equal the value of the good exchanged. The convenient instrument used for this purpose is money, whose permanent role as a measuring instrument we have established, and which remains at the heart of all decisions, whether by the producer or the consumer. Thus, the producer's choice to produce more or not at all is the result of a process of arbitrage through direct and cross-price elasticities, following the price incentive. The producer would have to find sufficient incentive to decide to increase supply, as desired by the incentive measure. Indeed, he or she will have to balance the additional gains to be expected as a result of the price incentive against the additional costs incurred by a greater effort to increase supply.

Pagina's: 264, Paperback, Our Knowledge Publishing