Fundamental Concepts and Terminologies — Economics STD 11 Commerce — Question
Gujarat BoardEnglish MediumSTD 11 CommerceEconomicsFundamental Concepts and Terminologies3 Marks
Question
Explain the relation between Use- Value and Exchange- Value.
✓
Answer
Value :
Value means the worth of one unit of a commodity in terms of units of another commodity in exchange.
There are two types of value.
Use – value.
The commodity which be utilize by man for daily routine work is called use – value. E.g. Air, water, sunlight, food etc. are important use – value
Exchange – value.
When one goods or service available in exchange of goods or service then that good or service is called exchange – value.
Following three characteristics are required in exchange value.
The commodity $($goods$)$ must have utility value or utilization value.
There must be a scarcity of a commodity $($goods$)$.
The exchange and barter will be compulsory required in the commodity $($goods$)$. It should be transferable.
In economic terminology, the value word is known as exchange value.
The concept of exchange value is relative.
To understand the value of one commodity there must be consider the value of other commodity.
From the exchange of one goods to another goods how much unit we get from another unit is called exchange – value.
E.g. in the exchange of wheat how much potato we get is called exchange – value.
Relationship between Use – Value and Exchange – Value:
It is not compulsory that the goods which have use – value always have exchange –value.
Value of goods – means not only use of value but also consider the purchasing power of other commodity from this commodity.
It is not always says that the goods which have use – value always have use of exchange but, it is compulsory that the use of exchange have always use – value.
E.g. for human air, water and Sunlight is very much use of value but their supply are universal, abundant and no one can control over it.
That is why the exchange value of that commodity is very low same way another side the use value of gold, silver and diamond is very low but to scarcity of it the exchange value is very high.
In the same manner according to time and place the value of exchange are more and less. E.g.
The value of sand in desert is zero. But the same sand is come in city for construction purpose it’s exchange value increase.
In the same way the value of water for exchange is zero but due to scarcity of pure water its exchange value increase.
In economics, whenever the word value is used its always understand as a term of exchange of value.
According to the economic terminology “How much unit of goods we get in exchange of Goods is consider as a value.
In another word, value – means goods and service in the place of goods or service is called exchange – value.”
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