The water-diamond paradox
A)occurs because goods essential to life such as water are cheap (and sometimes free).
B)occurs because nonessential goods such as diamonds are rare and therefore very expensive.
C)occurs because the price of a product is determined by its marginal utility,not its total utility.
D)All of the choices are correct.

Question

Quizplus · Accepted Answer

The water-diamond paradox highlights the difference in value between essential goods like water, which are cheap, and nonessential goods like diamonds, which are expensive, due to their marginal utility rather than their total utility. This encompasses all the provided choices, making them all correct in explaining aspects of the paradox.

The Water-Diamond Paradox