Resolving Adam Smith's Diamond-Water Puzzle Involves

Multiple Choice

Resolving Adam Smith's diamond-water puzzle involves

A) realizing that price is not directly related to total utility.
B) knowing that at optimal purchase, price will tend to equal marginal utility.
C) knowing that, as increasing quantities of a good are consumed, marginal utility diminishes and, conversely, consuming a small quantity of a good produces high marginal utility.
D) All of the responses are correct.