Multiple Choice
Which of the following statements is FALSE, with respect to what economist Adam Smith called the diamond-water paradox?
A) The total utility of water greatly exceeds the total utility derived from diamonds.
B) Total utility does not determine what people are willing to pay for a unit of a particular commodity; marginal utility does.
C) The demand for water is much smaller than the demand for diamonds.
D) There are relatively few diamonds, so the marginal utility of the last diamond consumed is relatively high.
Correct Answer:
Verified
Correct Answer:
Verified
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