With respect to water and diamonds, water
A) has a higher marginal utility than diamonds.
B) has a lower marginal utility than diamonds.
C) is cheaper than diamonds because it has a lower total utility.
D) is cheaper than diamonds because it has a higher total utility.

Question

Quizplus · Accepted Answer

Water has a lower marginal utility than diamonds because it is more abundant and readily available, whereas diamonds are scarce and thus have a higher marginal utility.

With Respect to Water and Diamonds, Water