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.

Question

Quizplus · Accepted Answer

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.

Statement I: the Marginal Utility of Diamonds We Purchase Is