Question

Explain the difference between use value and exchange value using an example for each (other than a watch) Why is it an important concept?

Answer 1

Use value mainly talks about the usage of any product or commodity in a manner in which it provides satisfaction. When a commodity has the power to fulfil the need of an individual, it is said to have a use value. The best example of somethung that has the utmost use value is water. On the other hand, exchange value, is the rate or value in which goods and services can be exchanged. This type of exchange mainly focuses on the rate of exchange of two concepts which is the place and time, and depends on different markets. An example of something which has a great exchange value is a diamond. Both the use value and exchange values are important concepts as it helps to understand the utilization of a commodity in a proper way and how to trade one good for other as per its value. It is also possible for a product to provide the utility but lack the value of exchange and to have a great exchange value but not carry any use value.