Value (economics)

[3] It is easy to see situations where the actual value is considerably larger than the market price: purchase of drinking water is one example.

Value for money forms part of the "economic dimension" of the five "cases" required to validate a UK government investment or spending proposal.

[5] In neoclassical economics, the value of an object or service is often seen as nothing but the price it would bring in an open and competitive market.

[citation needed] This is determined primarily by the demand for the object relative to supply in a perfectly competitive market.

"The value of a thing in any given time and place", according to Henry George, "is the largest amount of exertion that anyone will render in exchange for it.

But as men always seek to gratify their desires with the least exertion this is the lowest amount for which a similar thing can otherwise be obtained.

Others see values as part of his sociopolitical interpretation and critique of capitalism and other societies, and deny that it was intended to serve as a category of economics.

In 1860, John Ruskin published a critique of the economic concept of value from a moral point of view.

The market value of a machine part, for example, will depend upon a variety of objective facts involving its efficiency versus the efficiency of other types of part or other types of machine to make the kind of products that consumers will value in turn.

Economy, efficiency and effectiveness, often referred to as the "Three Es", may be used as complementary factors contributing to an assessment of the value for money provided by a purchase, project or activity.

The UK National Audit Office uses the following summaries to explain the meaning of each term: Sometimes a fourth 'E', equity, is also added.

Adam Smith agreed with certain aspects of labor theory of value, but believed it did not fully explain price and profit.

Which value theory holds true divides economic thinkers, and is the base for many socioeconomic and political beliefs.

Both David Ricardo and Karl Marx attempted to quantify and embody all labor components in order to develop a theory of the real, or natural, price of a commodity.

Subjectivist or marginalist theories of value were created by William Stanley Jevons, Léon Walras, and Carl Menger in the late 19th century.

This paradox was answered by the subjective theory of value by realizing that water, in total, is more valuable than diamonds because the first few units are necessary for life.