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In this video tutorial, the instructor demonstrates an exercise called "layers of value" which involves creating different levels of lightness and darkness using a basic pencil. The key concept is understanding the concept of value in art, which is the lightness or darkness of an image. The exercise involves creating four shapes, with the first shape being the lightest and gradually getting darker with each shape. The instructor shows how to shade by pressing lightly for lighter values and pressing darker for darker values. Adjusting the pressure and grip on the pencil can help in achieving different values. The tutorial emphasizes practice and going back to add more layers of value if needed.