We would expect the total utility of diamonds to be __________ than the total utility of water and the marginal utility of diamonds to be __________ than the marginal utility of water.
A)higher; higher
B)lower; lower
C)higher; lower
D)lower; higher

Question

Quizplus · Accepted Answer

The total utility of diamonds is lower than that of water because water is essential for life, making it more valuable in total. However, the marginal utility of diamonds is higher than that of water because each additional unit of diamond is perceived as more valuable due to its rarity, compared to an additional unit of water which is more abundant.

We Would Expect the Total Utility of Diamonds to Be