# Tag Info

9

It depends on the context, of course, but most often in policy analysis "the value of a life" has nothing (directly) to do with output, etc, but instead means the maximum amount that people would want the government to spend in order to save a randomly chosen life. So in a country of 300,000,000, the question is: What, to you, is the monetary equivalent ...

6

Because money is really just arbitrary numbers, and those numbers only really have any meaning in relation to the other numbers in the set. For example: Average salary is \$50,000 and a entry-level car costs \$10,000. If the price drops by \$5,000, it's well known that sales will go up, ceteris paribus. But what we increased all prices and all wages by a ... 6 Suppose the face value of a bond is$M$and its interest rate is$\tau$. This means it will pay$\tau \cdot M$interest every year (other periods are also possible) and at the end of its run (its maturity) it will also repay the face value$M$. Government bonds are usually sold in auctions. Whatever ends up being the market price is considered to be the ... 5 We need to distinguish two things here: the intrinsic value of the assets, and their fair value, or market value. No matter how much the price of an asset changes on financial markets (say, stock exchanges), its intrincic value stays the same, all other things equals. Typically, you could use the cost of the asset to assess its intrinsic value: for a house, ... 5 The word 'valuable' is not well defined in this question. If I am willing to buy an apple from you for \$1 and but I am only willing to sell an apple to you for \$4 which is more valuable: An apple or \$2? You cannot tell because neither option is sufficient to get the other option by trade. You are faced with the same dilemma in your problem. There are ...

5

"I have read that the Labour Theory of Value holds that the value of a good or service is determined by the total amount of labour involved in its production." That would be Adam Smith's version of the LTV, which according to him only holds in pre-capitalist societies. Karl Marx's version is thus: the value of a good or service is determined by the total ...

5

The whole point of the (specific) Labor Theory of Value that you apparently refer to, is that, what Labor "injects" as value into goods produced, is more than what Labor needs to consume in order to survive. This is a fundamental assumption/argument, in order to answer the question "how profits come about?". Then, since the theory argues that profits ...

5

No, the sale of a capital asset doesn’t count in GDP, as the cost of the asset was already accounted for when the plane was first sold to Delta. To your second point, if a broker somehow provided a service by facilitating the sale, that would count towards GDP, but the sale itself would not.

5

The answer, that can be found in greater detail in the following book Rudolf Richter, Money — Lectures on the Basis of General Equilibrium Theory and the Economics of Institutions, Springer, 1989. is quite simple. One has to create a positive marginal utility to the user. How one can achieve this aim? One has to create a positive demand for fiat money, ...

5

tl;dr as KennyLJ correctly points out the concept of correct price is meaningless and it does not exist or rather you could say any price is the correct price (but again this just makes the whole concept meaningless because if every price is correct then thats just a price - a concept of 'correctness' makes only sense if there are some incorrect instances). ...

4

You might want to check out Fermi estimation. XKCD did a very accessible example of Fermi estimation being used to estimate paint production. This method can be quite good at providing estimates within an order of magnitude of the correct answer.

4

GDP is a flow (of goods and services) while market capitalization is a stock measure. So I agree, this is not a great comparison. If we want to compare stocks, we'd compare total enterprise value (sum of equity and debt) to national domestic assets. But that's imperfect because much of what makes a country rich is labor income and that's not going to be in ...

4

A big part of the answer to this question must surely be network effects. Yes, Ford has a lot of engineering talent. But so has GM. This means that Ford has to compete with GM to sell cars, and this competition limits that amount of profit that Ford can make. Ride sharing is a different story altogether. Suppose you write software that completely ...

4

The "wealth" of a company is not a well-defined term. The worth of a company, its market value, is whatever someone is willing to pay for it. The market's best guess of that value, for listed companies, is equal to the share price multiplied by the number of shares in circulation. In theory, for both listed and unlisted companies, the worth of a company is ...

4

There is a lot to be said about this subject, and I will only give a partial insight. First off, value is subjective. Everyone will place different values on different things, depending on such things as personal preferences, their economic status and income, and thoughts about the future such as expected future income and wealth, and the future worth of ...

4

There are quite a few websites which will do a point-to-point calculation for you, if all you want is the comparison of the CPI. For example, https://www.measuringworth.com/uscompare/ Saying how much a dollar was "worth" at a past point, however, is not a very precise question unless it's made more specific. The price of computers, for example, have ...

4

There is no distinction between money in microeconomics or macroeconomics. In both fields money is medium of exchange, unit of account and store of value. The misconception you have probably arises from the role money plays in microeconomics and macroeconomics. In microeconomics money is almost always neutral - that is it has no impact on the real ...

3

Equity is defined as The value of an asset less the value of all liabilities on that asset. [source] This is a rather broad definition and equity can take on different forms. E.g., for a house, it is the difference between the market value of the house and the mortgage still owned by the owner. In the context of a company balance sheet, we usually talk ...

3

Since the exchange ratio of A to B is 10 to 1 in the first transfer and 5 to 1 in the second, it is clear that B is more valuable, although as @denesp says the exact value ratio is undefined. It's a very odd question because it focuses only on transfers between the coins and says nothing about the rates at which the coins might exchange for real goods, in ...

3

"And also does this have anything to do with discounting vs. coupon bonds, etc?" It does. Assume a bond without coupons, to be fully re-paid in a single payment. On it ("face value" $\equiv B$) the bond writes the amount to be paid, as well as the date of payment. In such a situation, the "face value" includes both the principal amount and the interest....

3

Think of it this way: A dollar today is worth more than a dollar tomorrow Why? Because today you can invest it, and have more money tomorrow! How much more money? It depends on the interest rate. The interest rate on government bonds basically says: "Whoever you are, if you lend me this money I am going to give you back all of it plus a certain interest". ...

3

The total wealth (as is pointed out in the book) is given as : $$X(1)=\delta_{0}B(1)+\delta_{1}S_{1}(1)+...\delta_{N}S_{N}(1)$$ The wealth at period one is just the sum of the securities (including amount invested in the bank) times their number. In other words, the total wealth is the amount of money this individual has invested in the different assets. ...

3

There is a long, theoretical answer to your question. I'm going to give a much abbreviated version, and some pointers to some excellent theoretical literature on the topic. The immediate answer is that the level of the currency doesn't matter, but rather the change in the level of the currency -- or, inflation -- matters. Then the next question is, why don'...

3

Yes, this is pretty standard stuff in economics. First, the simplest models contain it in a hidden form. Supply curves are derived from production functions, and include (marginal) cost of production. Technology innovation is then reflected in reduced production costs per unit. It can also change the indifference curves of consumers, leading to changes in ...

3

The video has a transcript with the references. The \$0.25B figure is obtained from here (after adjusting for inflation). Unfortunately, the author does not provide a source for the \$1.2B figure. However, there are estimates of the value of land elsewhere. For example, here. Their estimates on a map: These estimates consider the value of land only, ...

3

You are missing an integration constant $$\log\left(\frac{p + qF(t)}{1 - F(t)}\right) = (p + q)t + \color{red}{\tilde{C}}$$ This constant you can name it whatever you want, I'm going to name it as $$\color{red}{\tilde{C}} = \color{blue}{C}(p + q) + \ln q$$ where $C$ is just another constant. So I basically changed one constant for another one (...

3

On Gapminder's website they write If you have a question, maybe it's already answered in our Q&A. Q&A The underlined text links to a Google document, which answers several questions. Under one of these answers The households’ door numbers represent the consumption values (US dollars) that each adult in the household has per month. This ...

Only top voted, non community-wiki answers of a minimum length are eligible