The diamond-water paradox was solved by knowing that
A. the price of water and diamonds is determined by total utility received, not marginal utility.
B. the price of water and diamonds is determined by marginal utility, not total utility.
C. the total utility of water is greater than the total utility of diamonds.
D. the marginal utility of water is greater than the marginal utility of diamonds.
Answer: B
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Suppose Joe Rich owns his own company and does not pay himself a salary. This means the salary he could have earned in alternative employment is considered an implicit cost for the firm
a. True b. False Indicate whether the statement is true or false
Current discussions about the financing of congressional campaigns and presidential elections focus on the problem of
a. internalities b. externalities c. public goods d. public choice e. representation
Economists would describe cartels as
a. the opposite of ignoring interdependence. b. a collusive arrangement. c. an undesirable form of market organization that may charge a monopoly price. d. All of the above are correct.
?An aggregate supply curve with a positive slope is associated with an economy in which:
A. ?input prices and final goods prices always change by the same amount. B. ?firms expect output prices to be unaffected by changes in input prices. C. ?nominal wages and salaries do not change much in the short run. D. ? firms expect consumer demand to be unaffected by changes in prices of final goods.