4 ms·
> you should agree that the real value of a quarter pounder in NYC is simply higher The real value of the quarter pounder is the same, because the quarter poun
by ebg13 6y ago
> you should agree that the real value of a quarter pounder in NYC is simply higher
The real value of the quarter pounder is the same, because the quarter pounders are identical. The real cost is higher because each dollar buys less. The properties' real values are not the same, because the properties are not identical.
> the real value of a quarter pounder in NYC is simply higher due to the higher input costs
Cost is not value. Cost doesn't even create or drive value. Cost is the counterpoint to value in a trade equation. This holds true for both production and consumption.
Consumption side: Given two identical products at two different merchants with two different prices, I will choose the cheaper one, NOT because one of the identical products has greater value, but because the difference between the product's value and its price is greater, which means that I get to keep some of the money.
Production side: If the value of a thing is not more than it costs me to make, I will not spend resources to make that thing (unless I'm Softbank, har har).
Here are two thought experiments:
1. Say that NYC imposes a 500% sales tax on fast food tomorrow. Has the value of a Quarter Pounder gone up, or will McDonalds just close their NYC locations because nobody wants to pay that much for fast food?
2. Say I buy Quarter Pounder ingredients at some point equidistant from NYC and Buffalo, and then I teleport myself and the ingredients to NYC/Buffalo, and then I assemble the Quarter Pounder in NYC/Buffalo and eat it there. I am enriched (I assume) equally by the same ingredients composed into the same delicious (I assume) product. So what is different about the two scenarios? If I want to buy more, my dollars don't buy as much in the two places. But I have not changed, the Quarter Pounders have not changed, the ingredients have not changed, the labor has not changed, the storage has not changed. Those are all still identical to the ones I brought in. The difference is my dollars.