I’m struggling through Human Action. Can someone explain the options between A’s ranked value units and B’s ranked value units on page 120? I’m not catching on to the examples given. i.e., why would two units of B versus two units of A and the other example of two units of one versus three units of the other.
There is a study guide for download (free) by Robert P. Murphy:
http://mises.org/resources/3810/Study-Guide-to-Human-Action-A-Treatise-on-Economics
He’s got 8 things in all. 5 a’s and 3 b’s.
If he loses 2 hits of a, he lost things that are 7 and 8 in order of importance, meaning he has his top six prioroties satisfied.
But if he loses two hits of b, he only has priorities 1,2 , 3 ,4 7 and 8 satisfied. meaning he’s missing number 5. So that he only has his top four priorities satisfied.
Bottom line, he is better off losing his two a’s because that way he’s got his top 6 things satisfied, whereas losing two b’s will only give him his top four.
Next case: If he loses three hits of a, he has priorities 4, 7, and 8 killed. meaning his top three priorites are satisfied, but not number four.
If he loses two hits of b, he loses numbers 5 and 6 on the list. Meaning he still has 1, 2 ,3 and 4.
Bottom line, he’s satisfies more top priorities giving up the two b’s.
The thing to note is that he would rather have 1 only than 2 through 8 only. And having secured 1, he would rather have 2 only than 3 through 8 only. Etc
OK, hope that enlightens.
Rank Orders 1 2 3 4 5 6 7 8
Units a a b a b b a a
He would rather lose two units of a (7 and 8) than two units of b (5 and 6). Marginal utility.
He would rather lose two units of b (5 and 6) rather than three units of a (4). Subjective Theory of Value
have you tried using the study guide?
http://mises.org/books/humanactionstudy.pdf
and it is way easier to read Man, Economy, And State then read Human Action because Rothbard is far easier to read compared to Mises.