Science of economic human behavior

Money on a Time scale Sometimes people have money in the present, but they want to use it in the future. Other times they want to use money now, which they expect in the future. Saving and borrowing are nothing but means of moving money through time - savers move money from the present to the future, while borrowers move money from the future to the present. It is said that "Time literally is money... So, it is important to know how to calculate the time value of money..."What one needs to distinguish here is that: the cost of money (price) and value of money are two different quantitative concepts! Price is not a linear quantity - see the explanation in this book how price is related to demand. Money value quantifies the quality of assets and it is linear. Price-Quantity Relationship The Law of Demand is one of the most fundamental principles of economics that states: the higher the price, the lower the quantity demanded. That is, there a negative correlation between quantity demanded and price. Our Re-Formulation of the Law of Demand: Higher prices occur when there is a high demand and prices drop when fewer people want to buy. Price-Quality Relationship Another interesting relationship to understand is the relationship between price and quality. Again, one might expect there should be strong positive correlation between price and quality, but this is not the case!Empirical results testing the variation of price-quality correlations revealed that "in general, price appears to be a poor market signal of quality." That aligns with our true philosophy that the best things in life are free or available at a low price.