The Production and Exchange of Products - Essay Example

Economics In pricing, there are different things that are important in determining the cost of a commodity and various theories that explain how its value is determined. In this respected, I view pricing according to the perspective of the subjective theory of economy in which value is allocated according to the potential of a commodity to satisfy a need in people. From this viewpoint, the possibility to make profit comes from the process of exchange where the seller assigns a product a specific value that is likely to give returns of his desire, which could be higher than the cost of obtaining it though production or buying from another one. According to this system of pricing, it is not as the view of Smith and Marshall of the mixed bag where different people participate in production to a common pool and keep the products for all but is a situation where individuals have control over resources (Sandri 13). While people were producing and living in communities in the past, in the current day, people adopted the issue of capitalism where they advocate for individualism. This means that they maximize profit on any opportunities they have and they are therefore, profit maximizing rather than building a community minded and working to maximize their satisfaction of all (Sandri 31). In the market, different factors that influence the production and exchange of products determine wages and profits individuals or organizations make. The amount of a product in the market is a key determiner of its cost because the law of supply and demand implies that t if the supply is high, and the demand is low, the product will cost little amount of money and the if demand is high and the supply is low, the price will be high. This means that when prices are high, the chances for profit will be high and the vice versa is true even in payment of products and services including labor. In the subjective theory of value, people involve themselves in activities that cause them to exploit the opportunities they have in their environment without disruption from the society. In this theory, reform is not required because it ensures that people have their position in exploiting the environment so that they can get rewards and benefits in a specific venture. In the subjective theory of value, distribution of income among people is not encouraged because different people play different individualistic activities and the benefits of it extend to the one who participated in it (Sandri 21). In the subjective theory of value, people concentrate on the capitalistic models of economic system in which people concentrate on the different things that happen in the society and cause competiveness in people. In this model of economy, according to Marx, competitiveness ensures that few have a lot of resources while a large number of people have less to accumulate for their own. This theory of economy ensures privatization of property such as land and capital to various privileged individuals in the society (Sandri 27). My social theory is that capitalism which advocate for individualism and the potential of each individual in establishing a system of production and distribution of benefits. In this model of production, people focus on improving their lives and in the process the economy of all the people are improved. Government laws provide a framework for people to exploit the resources around the economy as well as regulating potential for exploitation of citizen in the capitalistic system. The role of the government in a system of economy should be to ensure stability and sustainability of the system so that there is continuity of production in the economy. Economics is not a pure science that operates according to set out rules but it is a science that operates according to variations that exist within contexts. This implies that people exchange goods and services as determined by the conditions that prevail in the environment in which the processes are taking place. In recommending a policy, a person needs to present evidences that help in defining the terms and conditions of implementation so that they cannot fail. In this respect, to recommend a policy or many policies, a person need to have the knowledge of the environment of the things they do so that they do not fail to get the right things by generalizing. The determiners of judgments made on an area which requires economic interpretation is to understand the environment of the people in according their potentials and preferences. In understanding the economic events in an economy, I try to understand the phenomena in which transactions take place and therefore, use the economic principles to explain why they happened the way they did. In this respect, I understand that all the rules of economic are liable to change in different contexts which affect people in their different situations. This means that the rules and principles of economics are likely to adjust according to the context of transaction and the issues of other equilibrium of the different things. Economic systems in the world change according to the different things that are in the environment of the people and which enhance their lives and to suit the conditions in the world. In this respect, the proto-systems that the previous people used effectively are outlived by the demands of the present day so that they do not have what it takes to undergo life with comfort. In this regard for example, the capitalistic system that worked for the people in a certain society in the past has evolved to adopt the new systems that will ensure that all the activities of people can happen with ease. This is in situations in which governments in various capitalistic states advocate for rules to sustain the system as well as making the exploitation of resources stable. In this respect, governments implement rules on ownership of property within the nation in which they operate and lead to economic improvement. My vision for the expression of humankind is that everyone should receive what they invest through their different activities and effort. This implies that a person should get as much as he has worked for and them that do not work should not be entitled to any privilege in sharing the rewards of the effort on another. This advocates the implementation of capitalistic system that will influence the ownership of property and goods that are available for the people. In order to improve this system, the government should ensure equitability in access to capital and other things that can promote the exploitation of the environment as well as prevent the exploitation of those who have less. The theory of subjective value is unified and it outlines the different things that determine the pricing of different commodities that are available in the market. This means that it is applicable in diverse environments according to the different principles of economy. My perspective about economics has not changed because I have always advocated for capitalistic system of economic relations that will ensure that all the people get that for which they have worked. However, I have learnt the needs to have governments implement rules and policies that will regulate the behavior of different people in the transactions. I would like to learn more about the various issues that cause different people to adopt different economic systems and how they came to existence. To get this issue, I will review different literature that has some information about the situations in the market and how they started. In this study, I will have a special interest in unemployment that causes different people to live in different ways in the environment and to look at the various things that determine the adjustment of the market for a long-run or short-run. Work Cited Sandri, Serena. Reflexivity in Economics: An Experimental Examination on the Self-Referentiality in Economic Theories. Heidelberg: Physica, 2008. Internet resource. Read More