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The theory of value is a term that encompasses all economic theories that try to define what economic value is, where it comes from, and how to quantify it through some objective metric, what we might call a price.  There are two fundamentally different conceptions of value within economic theory, one intrinsic and the other extrinsic. Intrinsic value is the value of a product that comes from the value of its inputs. Intrinsic value theory holds that the value of some commodity is inherent to it. That value is objective in that it is independent from any person’s individual evaluation of it, and thus from this perspective value is seen to be absolute. Extrinsic value can be seen as a value that is ascribed to a commodity due to the perceptions of society. Extrinsic value is a measure of the benefit provided by a good or service to an economic agent. Extrinsic value is captured in the concept of utility.

2016-10-14T22:38:21+00:00