This video does not mention that the price and the subjective value are not the same and that the actual value should equal the price or cost of producing and distributing the goods item. Thus the need for compertition will make the concept of subjective value of little significance, since all it does is to inspire the would-be purchaser to enquire about the actual price and or to attempt to make a contract for the item.

When there is imperfect competition or a monopoly, the price will exceed the total productive and distributive cost. This has the unfortunate effect of reducing the demand for the item being made and consequently the effect of the monopoly is to either cause the item to be imported or for it to be purchased from the home producer, but only to a limited degree. Both of these result in less employment in the home country, about which any monopolist worth his salt will not give a damn.

An interesting note on the example used for the feedback for answer b from question two ("The consumer perceives the value of the item to be less than the price.") is that people will actually change a larger amount of money for a smaller in certain situations. The most common instances are currency exchange and change machines (at least the ones that charge a surcharge).

These are also an excellent example of the difference between cost and value:

The cost of 40 quarters and a $10 note is exactly the same, but the value is different. Most people would rather carry around a $10 note than 40 quarters for fairly simple reasons (You'd need a whole jar of money just to pay for a meal at McDonalds), but when they want to use a coin operated drier you'd obviously rather have the coins.

The cost of 100 Brazilian reais and $52.64 Australian is identical as well, but the value differs by a great deal depending on whether you are in Australia or Brazil.

It seems to me that, in this video, they stop the economic thinking with Menger and Jevons. Classical economists relied heavily upon supply to determine prices (labour and labour costs), while Menger introduced subjective value (bygones are bygones). But it was Marshall who combined both principles into what is now considered the basis of microeconomics. He found that Menger's interpretation was right in the very short term, where supply is fixed, but that it no longer holds in the medium or long term. Why would the video try to explain then that every price is considered a subjective price and that 'bygones' do not matter in this? Or do I see this wrong?

Why doesn't anyone talk about Frederick Bastiat who wrote Harmonies of Political Economy and also inspired the Austrian School.

That Milton Friedman t-shirt is awesome!

I want one.

This is a really good point. It's like if you bought all the materials to make a house, but instead of forming them into a house you throw them into a heap on the ground. Lets say the materials and labor cost 200,000, and you then try to sell it for a profit... well, good luck selling that one. If you instead form it into a house with (for the sake of argument) the same cost of 200,000 dollars you would have a much easier time selling it, even though the dollar cost is the same. It's because "cost" and "value" are different. Kinda reminds me of the Chinese building all of those high rise buildings with no one to occupy them and acting like they have improved their economy. Maybe they have a big yuan value, but subjectivly they are worthless.

And yet despite the obvious points raised in this video people still try to resurrect the notion that prices should be set exclusively by the amount of labor put into it.

Most of the "Democratic Socialists" I run into online or elsewhere seem to have abandoned this altogether in favor of having a heavy wealth redistribution scheme, so I guess they are improving somewhat.

If sites like this gain more attention, then hopefully Democratic Socialists will reinvent capitalism altogether in the fashion of "Time Will Run Back."