Since there is a limited supply of diamonds in the world,the consumption of diamonds
A)is no less important than consumption of water.
B)takes priority over some other good.
C)takes place at relatively low marginal value.
D)should be regulated by the government.
E)takes place at relatively high marginal value.

Question

Quizplus · Accepted Answer

The limited supply of diamonds in the world means that the marginal value of each additional diamond is relatively high, which suggests that diamond consumption takes place at relatively high marginal value. While it is not necessarily more important than consumption of water or other goods, it does have a higher value due to its scarcity. There is no necessarily need for government regulation of diamond consumption.

Since There Is a Limited Supply of Diamonds in the World,the