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Mathematical investigations in the theory of value and prices / by Irving Fisher
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in the theory of value and prices.

i

53

The condition that the incomes are given is:

A 1 . p a + B l . p b + . +M, . p m = K, 1

A . p a + B, . p b + .+M a . p m = K, !

i m

I

A. p + B . p b + . +M . p m = K J

n equations,new unknowns(prices).

The utility functions (the cistern-forms) are:

c?U , d U > dU t-w,, \

= F(A 1 );- =F(B,);-; m =F(M.)

dA t

tfB,

tfU

£ =F(A ); S =F{B " );

d\}

dA ~ F(Aj); dB F(B,); ' ' ' ; dM F(Mj)

S= F(M ">

mn equations.mn newunknowns(marg. ut.).

The principle of proportion is:

rfU . rfU . rfU . rfU _

<£A, dB x ' dC 1 ' dM. t

f?U dV _ d IT _

dA .: '' r/B : . : cZM

dU dTJdA . <fB n

dU

dM»

=PaPiPc-

Pm

J

n ( m1)independentequations.

no newunknowns.

Total number of equations: wi + ra + wm + n (m- unknowns mn -|- m + mn+V

1) = 2 mn + m= 2 mn + m

Therefore all magnitudes are determinate and the number of thesemagnitudes as well as the number of the equations is twice the num-ber of commodities times the number of individuals plus the num-ber of commodities.

The valuation of money for each individual can be found fromthe equations:

rfXJ_ dA,dm j p a

(Ch.lV.ga.)

dm ,

etc.