![]() ![]() ![]() Value is consequently subjective – it depends on the person and circumstances and can be influenced by a variety of factors: Resources thus have minimal inherent value – they are worth only as much as we desire or need them. The greater the willingness to sacrifice, the more valuable the desired item. Because this is what she was willing to sacrifice - the value of the hut to Suzanna is the total value of her cost (20 Food + 20 Lumber + 3 minutes of labor). In order to do so, she was willing to pay the cost of 20 Food, 20 Lumber, and 3 minutes of labor. ![]() Let’s say Suzanna has purchased a hut like the one above. If you are willing to sacrifice four hours to study for an exam, your grade is valued at four hours time for you.Īll resources are valued in terms of what is sacrificed to obtain or keep them. If you are willing to sacrifice $2,000 for a new phone – it’s value (to you) is $2,000. Valueis defined as “what one is willing to sacrifice” to own or possess a resource. To create value, we must know what value is. Value is “what one is willing to sacrifice” In an ideal situation, an economist will identify ways to create new social value for resources we already have (to improve their use) or to create new resources altogether. avoiding waste and putting each resource to the best possible use. We decrease scarcity by improving the way we use manage resources. *The game referenced in this article is ‘ The Tribez ‘ offered by Game Insight UAB.īoth Businesses and Economists seek to facilitate more efficient resource management - businesses for greater profitability and economists to increase social welfare.įor economists, meeting the goal of maximizing happiness for society requires the minimization of scarcity - the situation where there are not enough resources for everything society wants to accomplish. ![]()
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