Cost-of-production theory of value

He states that mode of production can be understood as M-C-M’ where the purpose of gaining capital is reinvestment to keep producing more and more goods. The bourgeoisie class, the employers, benefit greatly from this system as they own the means of production whilst the proletariat class, the workers, sell their labour for wages and have no means of production. There is an exploitative relationship between the workers and employers. For the employer to add value to their goods, the labourer…

and could then trade with others. But, whether exchange is mediated through money or not. The word value has two meanings – one is value in use, the other is value in exchange. Smith writes, water is extremely useful, but has almost no exchange value, while a diamond is largely useless but has enormous exchange value. Today one might solve the diamonds and water problem with marginal utility theory: since diamonds are so rare,an additional one is a great prize, but since water is so plentiful,…

New York City. This prove that Apple Inc operating cost have reduces because the operating cost in China is lower than in its home country (Nagaraj, 2015). (Dudovskiy, 2014) Partner Countries The third component of star analysis that will be discussed is partner countries. The theory that is going to be related with partner countries is strategic alliances. Strategic alliances refer to cooperative agreements between potential or actual competitors that range from formal joint ventures to…

economic categories, reflecting the state of innovation activity is the concept of innovation. The evolution of the innovation development theory highlights the lack of consensus regarding the interpretation of the term "innovation". The essence of this category is revealed through the importance and necessity of its impact on the two main parts of economic theory - macro and microeconomics. On the one hand, innovation - is the use of new combinations of economic actors and methods in economic…

free market requires limited government interventions and allows the individual to act in their self-interest in their economic decisions. For example, according to the classical economic principle, the producer of an automobile should determine the value of…

exchange addition to the exporter is equivalent to the terms of exchange misfortune to the importers. The world welfare diminishes to four segments: the importer's negative consumption distortion , the importer's negative production distortion , the exporter's negative production distortion , and the exporter's negative consumption distortion . Since each of these is negative, the world welfare impact of the export subsidy is negative. The whole of the misfortunes on the world exceeds the whole…

Underneath these concepts of trade and globalisation we will explore the theories of competitive and comparative advantages of globalised business. A comparative advantage is the superior features of a country- such as natural endowment of resources or political structures- which provide it with distinct advantages in global competition. A competitive advantage is the unique assets or features of…

into three main types: cost-reduction, quality-enhancement, and innovation. However, several researchers and scholars appear to have applied this type of classification (Yao-Sheng, 2005). For example, the cost-reduction strategy tends to involve enhancing a particular organization’s competitiveness by reducing the price of its product/service such as the price of an airline ticket. According to Yao-Sheng (2005), this strategy tends to enhance what is described as production efficiency and…

into a more Marxist manner due to more stagnating economies of scale among firms, redevelopment of the utility and production of variable capital, and an increasing co-dependence between the state and industries. As ironic as this sounds, there is significant amount of evidence in modern society of that capitalism can turn into its reciprocal. Globalization, within the economic value helped stimulate more accessible movement of capital and labor among developed and developing nations in the 20th…

Smith, Karl Marx and Lenin were influential figures and economic thinkers whose ideas have affected the world’s economy for many generations and in many ways. They all had expressed their analysis and theories of Capitalism in their past works. However, the dynamics of capitalism in their theories change; and their views on whether capitalism is optimal or not also differ. The next paragraphs will examine how each thinker evaluates capitalism, their reasons and influences on modern economic…