From Cambridge to Eternity: “Market as a Framework of Reference”
Suppose the product “widget” to be traded in the market of Mini-polis with a certain number of households. For the sake of idealization we assume: ① T he widget endures half a year or so in average by ordinary uses of the household; ② T he utility per unit of widget declines at the household; ③ T he production cost per unit of widget increases over the month or so wherein the firm keeps the physical capital “fixed”; ④ T he invisible hand does not let wishful or dreaming traders in the market; the demander as potential purchaser shall be equipped with a wherewithal, or “money” as called in macroeconomics; the potential supplier with “widgets” to be provided in the month on demand; ⑤ C ertified public accountants take notes of individual exchanges in the market; ⑥ By various decrees of the commonwealth, the unit of account is the thaler , while the book closing for the purpose of financial accounting...