A concomitant increase of prices (↑Pq$) and of exchanged quantities (↑qI) can only be explained in of Umq∩Um$. Therefore, in the microeconomic sphere an increase of exchanged quantities (↑qI), in conformity with the law of decreasing marginal utility of an economic good, explains the behavior of total (αI) and marginal (Uq) exchanged utilities: con ↑αI ↓Uq. Our considerations about are also valid for the behavior of currency ($) as an q economic good. As to it being a currency, means of exchange of common use, it is important to ratify: Currency is an economic good. As an economic good it is governed by the axiom of the permanent positivity of prices (P$q˃ to which we add the 0) axiom of permanent positivity of marginal (U$˃ utility 0). An excessive expansion of implies the possibility of as a consequence $ P$q 0 → of 0. U$ → In this manner, we have duly demonstrated that: What explains and are not quantities or costs, but utility. value prices Utility is governed by the marginal laws of decreasing utility, with that of wealth determining prices (macroeconomics) and the corresponding law for economic goods determines the behavior of economic units (microeconomics) Currency as an economic good falls within the domain of the theory that explains value and prices and the marginal laws of decreasing utilities of any economic good. This denies the validity of any attempt to produce a special theory of currency and any quantitative theory that tries to explain currency prices and the price of currency. Variation of non-currency wealth We now analyze the variations of non-currency wealth, and for this we present graph 7. Graph 7 was built following the methodology of the preceding graphs: We have two of manifestations of wealth: that represents all the stock available q for exchange of wealth, and that represents the $ stock available for “non-currency” of currency wealth. exchange We must bear in mind that our curves of marginal utilities (Uq y are different U$) they represent the decreasing marginal utility obtained by the demander― ―because from the traditional curves of demand by Marshall of demand according to ―variation the price-data.
A concomitant increase of prices (↑Pq$) and of exchanged quantities (↑qI) can only be explained in of Umq∩Um$. Therefore, in the microeconomic sphere an increase of exchanged quantities (↑qI), in conformity with the law of decreasing marginal utility of an economic good, explains the behavior of total (αI) and marginal (Uq) exchanged utilities: ↑αI con ↓Uq. Our considerations about q are also valid for the behavior of currency ($) as an economic good. As to it being a currency, means of exchange of common use, it is important to ratify: Currency is an economic good. As an economic good it is governed by the axiom of the permanent positivity of prices (P$q˃ 0) to which we add the axiom of permanent positivity of marginal utility (U$˃ 0). An excessive expansion of $ implies the possibility of P$q → 0 as a consequence of U$ → 0. In this manner, we have duly demonstrated that: What explains value and prices are not quantities or costs, but utility. Utility is governed by the marginal laws of decreasing utility, with that of wealth determining prices (macroeconomics) and the corresponding law for economic goods determines the behavior of economic units (microeconomics) Currency as an economic good falls within the domain of the theory that explains value and prices and the marginal laws of decreasing utilities of any economic good. This denies the validity of any attempt to produce a special theory of currency and any quantitative theory that tries to explain currency prices and the price of currency. Variation of non-currency wealth We now analyze the variations of non-currency wealth, and for this we present graph 7. Graph 7 was built following the methodology of the preceding graphs: We have two of manifestations of wealth: q that represents all the stock available for exchange of “non-currency” wealth, and $ that represents the stock available for exchange of currency wealth. We must bear in mind that our curves of marginal utilities (Uq y U$) are different ―because they represent the decreasing marginal utility obtained by the demander― from the traditional curves of demand by Marshall ―variation of demand according to the price-data.
Theory_of_Value_and_Prices(Carlos_%20Bondone).docx