Question

True or false and WHY? Adam Smith's value theory is useful in resolving the paradox of value.

Answer 1

"True"

Adam Smith's value theory is useful in resolving the paradox of value. The paradox of value or Diamond water paradox is related to the high price of the diamond even though the water is more valuable for life than water. The value theory of Adam Smith says that the product which has used more average number of labor hour in production will be more costly.  

In a diamond the average number of labor hour spend is much more than the average labor hour spend in producing water which makes diamond much more costly than water.