The Water and Diamonds Paradox of Value

question 53

Multiple Choice

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

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Definitions:

Extinction

In behavioral psychology, the gradual weakening and disappearance of a conditioned response when the conditioned stimulus is presented without the unconditioned stimulus.

Spontaneous Recovery

A phenomenon in learning where a previously extinguished response reemerges after a period without exposure to the conditioned stimulus.

Bandura's Study

Refers to research conducted by psychologist Albert Bandura, especially known for his work on social learning theory and the concept of self-efficacy.

Aggression

Behavior intended to harm or intimidate others, manifesting physically or verbally.