Main menu

Pages

Production and benefit
Production is every interaction that create an economic good, As for the benefits, it is to achieve a certain satisfaction with the consumer. So production is really the creation of economic benefits.
A benefit is not a physical thing but rather a special feeling that a person feels as a result of acquiring or using a commodity. This feeling varies from person to person and cannot be considered an attribute of the watch.
-value and benefit.
Economists have distinguished from ancient times between two concepts. The first value is the value in use, which means the ability of something to satisfy a human need it. It is a purely personal value.
An example of the benefit of a glass of water for a person who is very thirsty is very large, and therefore it has a high use value. As for the benefit of a glass of water for a person who does not feel thirsty, it is low or no, and therefore its use value decreases.
Secondly, exchange value means the ability of on object to exchange for something else what is paid for the commodity to obtain it.
It is noted that all commodities, whether Free or economic, have a use value.
Only economic goods have a reciprocal value, unlike Free goods.
It is noted that the use value is a personal value, The exchange value is a social value and can Only exist if many individual exist and reside between them.
Value and price 
The exchange value includes the idea of the comparison or relationship between the exchanged quantities of two different things. 
Thus, the value of a commodity (X) can be expressed by mentioning the percentage of its exchange for another commodity (Y).
Exchanges in modern societies take place through money that facilitates the exchange process, not by the trade-offs that characterized ancient societies.
The swap is divided into two separate currencies. 
The first is to sell for cash. 
The second is to buy in exchange for cash. 
Thus, money is the general and standard measure of the values of things. 
-The amount that expresses the value of a single unit of a thing is called (the price), so the price of the thing is the monetary expression of its value in the market, and This price can be greater or less than the value.
In our study, we will limit ourselves to the prices of the (Free) market economy, that is, the prices determined by the Free interaction between supply and demand, and not the prices for the planned (socialist) market economy.

The development of value theory.

Economists had many opinions and interpretations of the value until the economist Alfred Marshall, who combined the views of Economists from before him, came out. Marshall explained that demend that depends on benefit and supply that depends on production costs determine between them the value of the commodity, and therefore the value cannot be fully explained by supply alone or by demand alone. It is necessary to combine them. 
- The main theoretical trends in the interpretation of value:
There are three main trends Economists havein interpreting value:
First, the interpretation of value from the supply side, where these Economists believe that the value of a commodity is determined by the cost of its production. 
This theory is called the traditional theory or objective theory of value. 
Within This trend, we can see the presence of two distinct categories. 
The category of those who argue that value is determined by the cost of all factors of production, labor, land, and capital. This theory is called the theory of value in production costs. 
A group of those who say that value is determined only by work and is called the theory of value in action. 
The second is the interpretation of value from the demand side only, they believe that the value of the commodity depends on the amount of its benefit, and since the benefit is a personal or psychological thing, therefore This trend is called the personal theory of value, but This trend that did not take its real intellectual strength until the proponents of This trend managed to merge the idea of scarcity  with the idea of utility in one theory is called the marginal utility theory. 
The third is the interpretation of value as a result of the interaction of the forces of supply and demand to gether. This theory was subjected to several criticisms in terms of the inability to quantify the benefit quantitatively and the inability to collect objective specific factors with personal subjective factors. 



Other articles on economics

reactions

Comments

table of contents title