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Higher Order Goods, What Determines What They Are Worth?

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Don Lloyd Posted: Thu, Feb 18 2010 7:03 PM

See my blog entry below for a brief argument that neither the value nor the price of higher order goods can, in general, be imputed from the value of an associated first order good.

http://mises.org/Community/blogs/donlloyd/archive/2010/02/06/the-subjective-value-of-mustard-and-its-implications.aspx

Regards, Don

 

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Stephen replied on Thu, Feb 18 2010 9:51 PM

So it depends on the value spread of the first order good and the cost of complementary factors. So what?

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Don Lloyd replied on Thu, Feb 18 2010 11:21 PM

No, it's not the cost of the complementary factor, the plain-hotdog in this case, but its subjective value, which in this case happens to be that of  a first order good in its own right.

Regards, Don

 

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