▁Pro ponents ▁of ▁the ▁theory ▁also ▁believe ▁that ▁in ▁a ▁free ▁market , ▁competition ▁between ▁individuals ▁seeking ▁to ▁trade ▁goods ▁they ▁possess ▁and ▁services ▁they ▁can ▁provide ▁for ▁goods ▁they ▁perce ive ▁as ▁being ▁of ▁higher ▁value ▁to ▁them ▁results ▁in ▁a ▁market ▁equilibrium ▁set ▁of ▁prices ▁emer ging . ▁▁ ▁Class ical ▁econom ists ▁such ▁as ▁David ▁Ric ardo ▁believed ▁that ▁individual ▁people ▁obtain ▁different ▁levels ▁of ▁utility ▁or ▁' value ▁in ▁use ' ▁from ▁a ▁service , ▁but ▁did ▁not ▁effectively ▁connect ▁those ▁with ▁market ▁prices , ▁or ▁' value ▁in ▁exchange ', ▁seeing ▁them ▁as ▁separately ▁derived ▁from ▁the ▁quantity ▁of ▁labour ▁input ▁and ▁other ▁production ▁factors . ▁▁▁▁ ▁Carl ▁Men ger ▁argued ▁that ▁production ▁was ▁simply ▁another ▁case ▁of ▁the ▁theory ▁of ▁marg inal ▁utility , ▁and ▁that ▁labour ers ' ▁w age - ear ning ▁potential ▁is ▁set ▁by ▁the ▁value ▁of ▁their ▁work ▁to ▁others ▁rather ▁than ▁subs istence ▁costs , ▁and ▁they ▁work ▁because ▁they ▁value ▁rem un er ation ▁more ▁highly ▁than ▁in activity . ▁ ▁Diam ond - water ▁par ado x ▁▁ ▁The ▁development ▁of ▁the ▁subject ive ▁theory ▁of ▁value ▁was ▁partly ▁motiv ated ▁by ▁the ▁need ▁to ▁solve ▁the ▁value - par ado x ▁which ▁had ▁puzz led ▁many ▁classical ▁econom ists . ▁This ▁par ado x , ▁also ▁referred ▁to ▁descript ively ▁as ▁the ▁diam ond - water ▁par ado x , ▁arose ▁when ▁value ▁was ▁attributed ▁to ▁things ▁such ▁as ▁the ▁amount ▁of ▁labor ▁that ▁went ▁into ▁the ▁production