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What determines the value of an item?
- (A) the amount of goods that are produced
- (B) the capital required to build the factory
- (C) the unlimited wants of the consumers
- (D) the resources consumed in production
Answer: the amount of goods that are produced. The amount of goods that are produced determines the value of an item.
The value of an item is determined by how much it cost to produce the item. However, the more items that are produced, the less the value of an item tends to be (as costs like electricity, water, rent, etc. are spread over more items), and thus the value of an item is partially determined by the amount of goods that are produced.