Statement I: The marginal utility of diamonds we purchase is quite high.
Statement II: The marginal utility of water we consume is quite high.

A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.

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Jordan Demary · Accepted Answer

Final Answer : A, Explanation :  The marginal utility of diamonds is high because they are rare and purchasing an additional diamond provides a significant increase in satisfaction. In contrast, water is abundant, and the marginal utility of consuming additional water is relatively low, especially beyond basic needs.

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Statement I: The marginal utility of diamonds we purchase is quite high.Statement II: The marginal utility of water we consume is quite high.A) Statement I is true and statement II is false.B) Statement II is true and statement I is false.C) Both statements are true.D) Both statements are false.

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