When writing this post I found myself a bit uncomfortable with terminology like “use value” and “exchange value” and so steered away from them – well also because a production function approach to the question is just so much damned clearer! Exchange value was fine, but use value I found a bit confusing – as I always wanted it to be defined either in terms of the buyer (their utility) or the seller, and even in terms of the seller are we talking about the price they sell at or their full economic cost (which includes the opportunity cost). This especially frustrated me as I know that 13 year old me used these terms all the time.
Now I think I have a clear idea on it all again, so I’m just noting this down so I can look it up in the future!
Use value: Read this as utility Matt. It is the value of the person using it.
Exchange value: Price.
You’ll notice something is missing here when I talked production functions though … the actual supply of goods and services.