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Suppose That in the Year 2050, One Gallon of Water

Question 135

Multiple Choice

Suppose that in the year 2050, one gallon of water is more expensive than a one-carat diamond. What could explain this?


A) Water must be much more scarce in the world of 2050 than today.
B) Diamonds must be much less scarce in the world of 2050 than today.
C) The diamond-water paradox does not hold for any pair of goods in the future.
D) The law of diminishing marginal utility no longer holds.
E) a or b

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