Asked by
Ashish yadav
on Oct 08, 2024
Verified
"Essential" water is cheaper than "nonessential" diamonds because:
A) new industrial uses for diamonds have been discovered.
B) the supply of water is great relative to demand and the supply of diamonds is small relative to demand.
C) although the total utility of diamonds is greater,their marginal utility is small.
D) the supply of diamonds is great relative to demand and the supply of water is small relative to demand.
Total Utility
The complete satisfaction obtained from consuming a certain quantity of goods or services.
Marginal Utility
The additional satisfaction or benefit (utility) a consumer gains from consuming one more unit of a good or service.
Supply and Demand
The fundamental economic model describing the balance between the quantity of goods available and the desire of buyers for it.
- Comprehend the rationale for the diamond-water paradox and differentiate between total utility and marginal utility.
Verified Answer
SM
Learning Objectives
- Comprehend the rationale for the diamond-water paradox and differentiate between total utility and marginal utility.