Basic Economics
Thomas Sowell
Prices
From the standpoint of society as a whole, the ‘cost’ of anything is the value that it has in alternative uses.
- In general, value as ultimately defined by scarcity. The value of one thing being whats given up for it.
- p. 10 resources tend to flow to their most valued uses?
- Prices are really trying to push for efficiency.
- There seems to be a lot of examples in the book. I’m still struggling to get comfortable with the notion that rising prices in a crisis might be a good thing.
- Prices as a signal that a good needs to be economised in the supply chain. An example by MRU is that an increase in oil caused a global supply chain of roses to develop.
- The price system is non deterministic in the sense that what outcome happens is unknown?