ABSTRACT
To demand, in economics is defined as “ to desire a com modity and to possess the ability to purchase it.” Thus a small boy looking longingly in a sweet-shop window but not possessing a penny is not “ demanding ” sweets much as he may desire them. Even if he has a penny, but the smallest quantity of sweets sold costs 2d., he will still not be demanding sweets, though he might be if they were ioo per cent, cheaper. Lastly, if the small boy became the proud possessor of 2d. he might still hesitate ; he might be wondering if 2d. expended at the “ pictures ” would not yield him greater satisfaction. If he can only get one ounce of sweets for 2d. he might decide in favour of the " pictures,” but if he could get two ounces he might make the reverse decision. Having decided the momen tous question in favour of sweets he will still have to make the only less momentous decision as to which kind he is going to buy. Though the small boy does not know it, what he is really trying to do is to gain the maximum satisfaction from the expenditure of 2d., and that is what everyone from the multi-millionaire to the old-age pen sioner is trying to do, more or less energetically, with the money which they possess. Of course not everyone thinks as long and as seriously about the expenditure of 2d. as our small boy. But many persons have to consider before they spend a shilling and many more before they spend a pound. Even the millionaire may hesitate between buy ing a shooting box or a steam yacht. It is sometimes supposed that very rich people give no thought to their expenditure. But often they are persons of keen business instincts with a strong objection to paying more for a thing
than it is worth ; moreover a good deal of their expenditure is done for them by paid subordinates who would lay them selves open to the charge of inefficiency or even dishonesty unless a fair return for money expended were forthcoming. Quite apart from anything else, we become accustomed to certain prices for things and have a feeling that we are being cheated if we are asked more. So that many persons will do without a newspaper or a tram ride if it costs 2d. instead of id., though they would never really miss so small a sum as id.
