Asked by
Tatyana Washington
on Nov 25, 2024
Verified
The price of diamonds is substantially greater than the price of water because
A) the total utility of water is greater than the total utility of diamonds.
B) the total utility of diamonds is greater than the total utility of water.
C) the marginal utility of the last diamond purchased is significantly greater than the marginal utility of the last gallon of water purchased by a typical person.
D) the marginal utility of the last diamond purchased is significantly less than the marginal utility of the last gallon of water purchased by a typical person.
Marginal Utility
The additional satisfaction or benefit (utility) a consumer receives from consuming one additional unit of a good or service.
Price of Diamonds
The cost at which diamonds are sold or bought, influenced by several factors including quality, supply, and demand.
Price of Water
The cost assigned to water consumption, varying based on location, availability, and delivery methods.
- Elucidate the value paradox, commonly referred to as the diamond-water paradox.
Verified Answer
AG
Learning Objectives
- Elucidate the value paradox, commonly referred to as the diamond-water paradox.