ABSTRACT
There is an old saying that “economists know the price of everything and the value of nothing.” While I can understand how people from other disciplines could reach this conclusion, I think it’s generally inaccurate. Economists typically do not care how many dollars and cents we are willing to part with for something, except inasmuch as dollars and cents provide us with a useful shorthand for discussing more meaningful tradeoffs. In fact, a point often emphasised in introductory economics courses is that monetary amounts are simply units of account, with no absolute significance. Monetary amounts reflected in prices are meaningful only to the extent that they reflect the relative importance attached to one thing compared to another.
