Exchanges provide us with the objective information we need to make affirmative statements about market activity and what drives it.
Month: July 2016
Subjective Value
See how, for you, every determination of value results from your own subjective judgment…
Money Not a Measure of Value
A dollar cannot represent the value for an item of less value than a dollar
Cost of Production Value Theory
Probably the most popular concept of value incorporates the cost of production. The idea here is that any economic good, whether a consumer good or production good, has value based on the sum of the costs of resources used to produce it. A loaf of bread, for example, would have the value of the sum … Continue reading Cost of Production Value Theory
Labor Theory of Value
Source Some people believe that, since all economic goods require some amount of labor to produce (even "free" goods require the labor to pick them up off the ground, pluck them off a bush, or capture them with one's hands,) economic goods get their value from the labor required for their production. Formal explanations of … Continue reading Labor Theory of Value
Intrinsic Value
Believing that the value of a thing resides within an object or action seems like an easy approach at the outset. But the idea of intrinsic value falls apart, as do several of the value theories, based on our criteria: source and measure. Source The idea of intrinsic value argues that something in an object … Continue reading Intrinsic Value
Conflicting Value Theories
In spite of the importance of value to the development of sound economic theory a lot of people disagree about the source and measure of value. I will touch on the more prominent value theories Over the next couple of posts. But, before I move on to the discussion of the theories of economic value … Continue reading Conflicting Value Theories
Value: Summary
Before I move on to describe market exchanges in a bit more depth I would like to summarize the previous comments on value—in part because I encountered a bit of delay since my last post. Understanding value provides a foundation for understanding all other economic concepts. In order to distribute resources effectively and efficiently the … Continue reading Value: Summary