Price and Value Agreement

Is the value of something equal to the price tag placed on it? Is the value and worth of something the same for every person? This is something that many struggle with understanding properly. To fully understand this concept then you must understand the true difference between the value, price, and worth of something. I intend to explain these and provide you with a better understanding by the end of this paper. Have you ever went grocery shopping and purchased multiple items just because there was a half off sale; or a buy one and get one free sale? Many of you probably have, I am one myself that is guilty of this. However, have you ever really thought about the value of that additional item? Since it was free does it mean that there was not value of it either? This is where the importance of knowing the difference in value and price. The value of something does not determine the price of it; the price is determined by the demand of something and how many are available, or otherwise known as the supply. If there is a high demand of something then there is going to be a lower supply of them available. When the supply is low and the demand is high; people are willing to pay more for that item when it is available. This is something that you see happening during the holiday season. For example, a few years ago when the Tickle Me Elmo’s were so popular, the stores increased the prices by almost double just because they knew that people would pay it. Are you one of those people that will pay the price for something you want, regardless on how much it is? There are many of people that do; but not me. I am one of those that will wait for the price to go down; or will do research online to look and see if I can find it cheaper. I am not one of those people that have to have the best of everything; although I do like to stay within the modern days. However, I am willing to pay more for fuel and true necessities. I know that there are smaller stores and gas stations that have these things but price them higher; however, I figure if I can get everything that I need at that time in one stop then why should I waste gas to drive around to find what I am looking for? I have also realized that the name brand items are more expensive that the generic items. This sometimes means that you get cheaper made products, depending on what you are looking at at that particular time. I will pay more for the more popular and name brand items when it comes to vehicles and electronics; but I am all for the generic in everything else. There are sometimes that I prefer name brand jeans; but that is just because they are stronger material for when I work. My uncle is from Mexico and sends money home often. He indicated that the last time he sent money the exchange rate was fourteen peso to the American dollar. So does this mean that if something costs fourteen thousand dollars here that it is only one thousand in Mexico? No, it does not. Something that would cost 32 peso in Mexico would convert to costing two dollars and twenty five cents in American dollars. However that same thing is going to cost roughly three dollars and sixty cents here. Mexico has a much lower income rate so therefore the cost of living is lower. This also applies for each state here in the United States. There are different states that have higher income levels, thus higher cost of living. This means that goods, services, homes, and many other things are going to be more expensive in that state than what you could get in another state. With this being said; is a three bedroom home is California worth more or better than the same three bedroom home in Montana? This does not make the house any better than the other; however, does make it worth more. This is because California is a much more desired state to live in and work because of the attractions and the income level being so high. Therefore, the real estate prices and value go up. The house in California is also going to have a different type of structure that the one in Montana and that is because of the different climate threats and weather conditions; therefore, that also raises the value of the property. However, the largest asset that is going to determine the value of the property is the location of it. I personally would pass up an opportunity to live in a large state and city any day just to stay in my little town. I may not live in the best house but I do live in the best neighborhood of my town. I don’t have to worry about the crime and violence where I am as much as others do. The one thing to remember about property value is that it is better to be the roughest house in the best neighborhood than what it is to be the best house in the roughest neighborhood. This is once again because of the location determine the value of the home. Not only have the value and prices of real estate in my area went down over the years with the economy; but the value of the American dollar has as well. This is caused the cost of living to increase and therefore, the minimum wage has also. When I first started working the minimum wage was only $5. 15 per hour. Here is Indiana it was actually that for many years up until here just a few years ago. Since the cost of living has gone up, the minimum wage has now gone up to $7. 25 per hour here. I try not to look at it as me only being worth that much; but my time for the company being worth that much. I know that my time is worth more to my family; however, I have to have a means of supporting them. I think it is really hard to determine the worth of people dependant on their career choice. I say this because when we take a rookie baseball player making five million dollars a year and a veteran teacher only makes sixty thousand dollars a year; it is really hard to believe that a baseball player does more good than a teacher. The baseball player makes more because they generate trillions of dollars in income annually for the team; thus why they are able to be paid so much. Although the teachers put in just as much time, if not more, they do not generate any income for the schools, so they could be considered an expense. The funding to pay the teachers come from the government and therefore, is much less than that of a baseball player. However, I do not think that the amount of income can determine one’s worth; especially in this situation. I think I would have to say that I am willing to do many jobs to support myself and my family; however, the one that I am not willing to do is fast food. This is because I can not take the heat of being in the kitchen and dealing with the rude customers. It is also a proven fact that those that work in fast food are more apt to be overweight and not healthy. I have enough problems with my weight the way it is; I don’t need the help of the fast food. Price, value, and worth are all related in one way or another. You make decisions on the worth of the item to you every time you decide to make a purchase or not be determining if the item is worth enough to you to pay the price. The higher the demand equals the lower the supply; therefore, the lower the supply equals the higher the price. The worth is determined by each individual because an item may be worth more to one person than it is to another.