An Explanation for How the Price of Water Can Be

question 16

Multiple Choice

An explanation for how the price of water can be less than the price of diamonds,even though water is more valuable,is that

• A) price is a poor guide to value.
• B) markets for water and diamonds are not competitive.
• C) price reflects marginal value,not total value.
• D) diamond production requires more labor,and value is based on labor.

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Definitions:

Test Statistic

A measure calculated from a sample data to perform a hypothesis test.

P-Value

The likelihood of getting findings from tests that are at least as extreme as what was observed, assuming the correctness of the null hypothesis.

Null Hypothesis

A statistical hypothesis that assumes no significant difference or effect, serving as the default assumption that is tested against an alternative hypothesis.

Type I Error

The incorrect rejection of a true null hypothesis, often referred to as a "false positive."