Saturday, June 02, 2007

Which blade of the scissors cuts the paper?

The Washington Post reviews Robert Frank's new book, The Economic Naturalist. This sentence caught my eye:
We are told, for example, that sometimes goods are priced on the basis of what it costs to produce them (brown eggs) and sometimes on the basis of what people are willing to pay (sleeker, black colored Apple computers), but nowhere does Frank help us resolve this tension between demand and supply-side determination.
A reminder that even the basic ec 10 lessons are not obvious.