Adam smith''s theory of value and limitations

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Reference no: EM13199658

present Adam Smith's theory of value and limitations. Is this answer is right to the following question?

1. Labor cost: he supported that everyone must produce his own goods using own labor and exchange the surplus with other goods. In this model of society no capital and no wage labor. The commodities are valued based on hours of labor that needed for the production. Based the above the only input that used to find the cost of a commodity is labor. Smith concludes that labor it is the only factor of production. Also it is easier to determine the price of a good when comparing with other goods

2. Labor Command : the
value of commodities is determined by the quantity of labour that a given commodity can purchase.

3. cost of production is this the adding up theory of value?
according to which the value of a commodity is determined by the sum of three natural incomes,that is, natural wages, natural profit and natural rents

Reference no: EM13199658

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