My current understanding is that, in general, the value of something can be represented/quantifiable by the units of some other things that can be directly obtained by putting that thing into usage. If it stays idle without doing anything, the value is essentially zero.
I think this is a bit more complicated because one can keep cash balances in hand, in anticipation of future expenses. At all times, all money is actually idle in someone’s account.
I can value a business to be worth $10M. But someone else might value it more/less than $10M. Does that mean there is no universal representation of the value of something?
Economic value is subjective, or at least subjective for all practical purposes. Willingness to pay is probably the best way we have to measure how much we value something. Although complications arise when we try to compare how much different people value something based on their willingness to pay, because different people have different budget constraints to begin with, and also diminishing marginal utility of money.
I think this is a bit more complicated because one can keep cash balances in hand, in anticipation of future expenses. At all times, all money is actually idle in someone’s account.
Economic value is subjective, or at least subjective for all practical purposes. Willingness to pay is probably the best way we have to measure how much we value something. Although complications arise when we try to compare how much different people value something based on their willingness to pay, because different people have different budget constraints to begin with, and also diminishing marginal utility of money.