The reason that diamonds cost more than water is
A. most consumers consume little water.
B. diamonds are more beautiful than water.
C. the marginal utility of each diamond a consumer purchases is quite high due to the small amount of diamonds that most consumers purchase.
D. water is a necessity.
Answer: C
You might also like to view...
Whenever the supply of a product decreases and the demand for the product increases,
a. the quantity exchanged in the market will increase. b. equilibrium price will rise. c. the quantity exchanged in the market will decrease. d. equilibrium price will fall.
The mechanism behind the inflation insulation provided by a floating exchange rate is
A) Purchasing Power Parity. B) a fixed AA curve. C) market speculation. D) tight monetary policy. E) symmetry.
The European Central Bank (ECB) pursues a hybrid monetary policy strategy that has elements in common with the -targeting strategy previously used by the Bundesbank but also includes some elements of targeting
A) monetary; inflation B) inflation; monetary C) monetary; exchange rate D) monetary; nominal GDP
In a competitive market, if buyers did not know all the prices charged by the many firms
A) all firms still face horizontal demand curves. B) firms sell a differentiated product. C) demand curves can be downward sloping for some or all firms. D) the number of firms will most likely decrease.