Written Assignment

Written Assignment - ECON 4313 The Russian Economy Written...

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ECON 4313 – The Russian Economy Written Assignment Oskar Lange, by quoting economist Philip Wicksteed, distinguishes between a narrow definition of price, which is talking about ‘the money for which a material, a service or privilege can be obtained,’ and a wider definition of price is about ‘the terms on which alternatives are offered to us (Lange, p. 54).’ Moreover, Lange asserts that Mises’ contention is founded on a confusion that prices in the narrower sense are required for efficient allocation of resources. However, prices in the wider sense are enough. Mises argued that a rational economy is not conceivable without markets for capital goods and raw materials, which are required to price factors of production. Lange's suggestion is to price factors of production using a method of trial and error, similar to one that brings about equilibrium in competitive markets using utility functions, initial resources and production functions (Lange, p. 55). Lange recommended that central planning boards set prices through "trial and error",
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This note was uploaded on 12/29/2010 for the course ECON 4313 taught by Professor Staff during the Fall '08 term at Minnesota.

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Written Assignment - ECON 4313 The Russian Economy Written...

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