If Water Is Essential for Life, While Diamonds Are Not

question 163

Multiple Choice

If water is essential for life, while diamonds are not, then why is water cheaper than diamonds?

• A) Because most people would rather die with a big diamond ring than live without one.
• B) Because the total utility generated by diamonds is larger than the total utility generated by water.
• C) Because most people do not understand their total need for water.
• D) Because water is abundant, the marginal utility of water is low, and price reflects marginal utility, not total utility.

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Definitions:

Curiosity

A strong desire to learn or know about something, driving exploration and discovery.

Humility

The quality of having a modest or low view of one's importance, often allowing one to be open to learning and perspectives of others.

Psychodynamic Perspective

A theoretical approach in psychology that emphasizes unconscious psychological processes and contends that childhood experiences are crucial in shaping adult personality.

Empirical Approach

A method of research that relies on direct and indirect observation or experience for the acquisition of knowledge.