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wants. As civilization increased these wants became refined and cultural wants appeared. Wants are satisfied by goods and services. Some goods are furnished by nature in such abundance that they are free to all men. Others are limited in quantity and an effort is required to secure them. These goods are economic goods. In satisfying wants goods are consumed. Goods that are destroyed in satisfying a single want are perishable goods. Goods that satisfy a series of wants are durable goods. Useful consumption of goods is any use of goods which gives pleasure or satisfaction without harm to the body or mind.
TOPICS FOR DISCUSSION, DEBATE, AND SPECIAL REPORTS
I. Why are breakfast foods and crackers usually sold in boxes rather than in bulk? Is the extra expense justified ?
2. Show that a man's place in the scale of civilization is determined by the nature of his wants.
3. Even a savage enjoys music, but we are told that the best music is appreciated only by those who have a cultivated taste. How does a jazz band compare with a symphony orchestra 2 What agencies for the promotion of good music exist in your community?
4. Give some examples from your own experience of goods which are ordinarily economic goods becoming free goods. What goods which were once free goods in your community are now economic goods?
5. Under what circumstances may it be an economic expenditure of time and money to attend a moving-picture show? When would it be uneconomic?
CONSUMPTION OF WEALTH FURTHER CONSIDERED
The Law of Satiety.—At any one time any want is capable of being completely satisfied, or satiated. For example, a person may be exceedingly hungry. A piece of bread would be devoured eagerly and this might be followed by other pieces until the time would come when the desire for bread would be satiated. The total utility of the bread to this person would be the utility derived from all the slices he had eaten in satisfying his hunger.
The Law of Diminishing Utility.—The satisfaction from the first slice of bread would be great. Let us indicate it by the numeral Io. The second slice would give less satisfaction, which may be indicated by the numeral 9. Each subsequent slice would be less desired, until the tenth slice would give only a satisfaction which would be expressed by the numeral I. After consuming ten slices, no more bread is desired, the point of satiety has been reached. The utility of the last piece eaten is the marginal utility, that is, the piece which yields the least satisfaction. The following table shows total utility and marginal utility in the illustration of the successive slices of bread:
Units of Bread Satisfaction Derived
Units of Bread Satisfaction Derived
Total Units Io Total Utility. 55
Of course, if the consumption of bread stopped short of the point of satiety, the total and marginal utility would be otherwise. For example, if only five slices of bread were consumed, as will be seen by the figures, the total utility would be 40 and the marginal utility would be 6. To consume more bread than the ten slices would be positive discomfort, or disutility. The law of diminishing utility applies to all things. To the lover of music a symphony concert is a great pleasure, but after listening to a concert for two hours, the desire for music is for the time satisfied and additional concerts following at once would be a disutility. The same rule applies to material objects which render a series of satisfactions. One phonograph might be intensely desired; another of the same kind would not be a cause of much satisfaction; while a third would not be wanted in the same household. The Law of Variety.—Since we cannot have everything we want, we spend our money for those things which we want the most. There is a constant balancing of the advantages afforded by one kind of expenditures over those which might be afforded by another. We must often choose between present wants and future wants. A prudent person who cannot enjoy a summer vacation, except at the expense of being without coal during the coming winter, will forego his vacation.
Every satisfaction costs something in terms of other possible enjoyments; not only is this the case, but there is a balancing of the pleasure of consumption against the pain, or discomfort, of additional production. By working overtime a person might gain income for increased consumption, but he may decide that the extra effort is not worth while.
The Economic Order of Consumption.—The consumption of a good is seldom continued to the point of satiety; greater satisfaction is afforded by stopping short of the point of Satiety in any one good and consuming other goods. Thus if a person had seventy-five cents to spend for his dinner, he would not spend it all upon bread. The more economic order would be to use part for potatoes, meat, coffee, and a dessert. Thus we might divide the seventy-five cents into ten units of 7.5 cents each and the economic order of consumption would be somewhat like the following:
In this case 7.5 cents would be spent for bread; 15 cents for potatoes; 30 cents for meat; 15 cents for dessert; and 7.5 cents for coffee. The marginal utility is 9 in each commodity and the total utility of all the commodities is 98. Consumer's Goods and Producer's Goods.--Some goods are used to satisfy wants. These are called consumers' goods. Others are used in the production of more goods. These are producers’ goods. Coal which is used to heat a \ dwelling is a consumers’ good; if used to produce power to run a factory it is a producer's good. In a later chapter we shall discuss producers’ goods. Consumers' goods may be classified as necessaries, comforts, and luxuries. Necessaries.—Necessaries are those goods which must be consumed in order to preserve health and strength. There should also be included those goods, which although not necessary in a physical sense, are necessary in order to preserve self-respect. “A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably, though they had no linen. But in the present time, through the greater part of Europe, a creditable day-laborer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which it is presumed nobody can well fall into without extreme bad conduct. Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person of either sex would be ashamed to appear in public without them. In Scotland custom has rendered them a necessary of life to the lowest order of men, but not to the same order of women, who may, without any discredit, walk about barefooted. Under necessaries, therefore, I comprehend, not only those things which nature, but those things which