ABSTRACT
The distinction generally made between the theory of the pricing of final products and the theory of the pricing of factors of production is some thing of a carryover from the early division of economics into two parts, "value" and "distribution." The theory of value concerned itself wi th the prices of final products, and the theory of distribution concerned itself wi th the prices of factors of production, primarily as a guide to understand ing the division of the total product among major social classes (hence the designation, "distribution"). The theory of general equilibrium merged these two inquiries as parts of one pricing problem involving the simul taneous determination of both sets of prices. At the same time, Marshall's emphasis on supply and demand as an "engine of analysis" rather than on the substantive thing analyzed made i t clear that the same analytical apparatus is applicable to the pricing of final products and of factors; in both cases the problem can be expressed in terms of demand and sup ply and the crucial question is what determines the shapes of these curves.
