Suppose that in the year 2050,one gallon of water is more expensive than a one-carat diamond.What could explain this?
A) There is much less water in the world of 2050 than today.
B) There are many more diamonds in the world of 2050 than today.
C) The diamond-water paradox does not hold for any pair of goods.
D) The law of diminishing marginal utility no longer holds.
E) a or b

Question

Quizplus · Accepted Answer

If water becomes more expensive than diamonds, it could be due to a significant decrease in water supply (A) or an increase in diamond supply (B), making water more scarce or diamonds more abundant, respectively.

Suppose That in the Year 2050,one Gallon of Water Is