Question

State with a reason whether you agree or disagree with the following statement:

Value-in-use and Value-in-exchange are the same.

Answer 1

I disagree with the given statement.

Reason:

Value-in-use and value-in-exchange are not the same.

• Value-in-use refers to the utility or usefulness of a commodity. It shows how much satisfaction or benefit a person gets from using a good or service.
  Example: Water has a very high value-in-use because it is essential for life.

• Value-in-exchange refers to the purchasing power or exchange value of a commodity in the market, that is, how much of other goods or money it can be exchanged for.
  Example: Diamonds have a high value-in-exchange because they can be sold for a large amount of money.

Thus, though water has a high value-in-use and diamonds have a high value-in-exchange, they are not the same.