Adam Smith's Diamond-Water Puzzle

question 3

Multiple Choice

Adam Smith's diamond-water puzzle

• A)can be resolved by distinguishing between marginal and total utility.
• B)occurs because diamonds have no utility.
• C)occurs because scarcity increases total utility.
• D)will likely never be resolved with existing economic tools.

---

Definitions:

Market Control

The ability of a single entity or a few entities to significantly influence the conditions or terms in a particular market.

Input Standards

Pre-defined criteria or benchmarks used to measure the quality, quantity, or timeliness of inputs in a production or manufacturing process.

Output Standards

Benchmarks set to measure the quantity, quality, or performance of a product or service produced.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, opposite to a normal good.