The diamond-water paradox arises because
A)essential goods may be cheap, while nonessential goods may be expensive.
B)the marginal utility of certain products increases, rather than diminishes.
C)essential goods are always higher priced than nonessential goods.
D)we sometimes fail to use money as a standard of value.

Question

Quizplus · Accepted Answer

The diamond-water paradox highlights the contradiction that essential goods like water, which are crucial for survival, can be very cheap, while nonessential goods like diamonds, which do not support basic life needs, can be extremely expensive. This is primarily due to the concepts of marginal utility and scarcity.

The Diamond-Water Paradox Arises Because