The water and diamonds paradox of value
A) is that water is essential for life and yet is cheap, whereas diamonds are totally nonessential and yet are expensive.
B) points out that we generally have a low total utility of water and a high total utility of diamonds.
C) is resolved by the principle that market price is determined by total utility, not marginal utility.
D) none of the above

Question

Quizplus · Accepted Answer

The paradox of value highlights the difference between total utility and marginal utility, where water has high total utility but low marginal utility, making it cheap, while diamonds have low total utility but high marginal utility, making them expensive.

The Water and Diamonds Paradox of Value