Cigarettes illustrate the difference between value in exchange and in use.
The price of cigarettes reflects the costs of production, competition among suppliers, and levels of demand. The price has no relation to human well-being as society judges it. The more consumers are willing to pay to smoke, the worse off they are, according to doctors and other respected social authorities. Cigarettes, therefore, have a positive exchange value but a negative value in use. Suppose a well-meaning team of economists, seeing that cigarettes are bad for health, wished to correct the price of cigarettes to make it better reflect their negative welfare effect.