The water and diamonds paradox of value
A) is that water is essential for life and yet is cheap, whereas diamonds are totally nonessential and yet are expensive.
B) points out that we generally have a low total utility of water and a high total utility of diamonds.
C) is resolved by the principle that market price is determined by total utility, not marginal utility.
D) none of the above
A
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Assuming a homogeneous product, the Bertrand duopoly equilibrium price is
A) the same as the Cournot equilibrium price. B) less than the Cournot equilibrium price. C) greater than the Cournot equilibrium price. D) equal to the monopoly price.
Black-market prices are below equilibrium prices because sellers want to sell large quantities
a. True b. False Indicate whether the statement is true or false
Suppose that deposit insurance were reduced to a maximum of $50,000 per account (instead of $250,000). This would address the specific market imperfection of
a. externalities. b. imperfect information. c. rent seeking. d. moral hazard.
The future value of a deposit in a savings account will be larger
a. the longer a person waits to withdraw the funds. b. the higher the interest rate is. c. the larger the initial deposit is. d. All of the above are correct.