The Paradox of Value Refers to the

question 107

Multiple Choice

The paradox of value refers to the

• A) utility maximizing rule.
• B) fact that water is vital but cheap while diamonds are relatively useless but expensive.
• C) fact that consumers have different preferences and utility schedules.
• D) law of demand.
• E) issue of why the consumer surplus from water equals the consumer surplus from diamonds.

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Definitions:

Incongruous

Incongruous refers to something that is not in harmony or keeping with the surroundings or other aspects of something, often leading to a sense of discrepancy or inconsistency.

Distorted

The term distorted describes something that has been twisted out of its original, true, or natural shape, often leading to a misrepresentation of reality.

Inadequate

Lacking the quality or quantity required; insufficient for a purpose.

Clarification

The act of making a statement or situation less confused and more comprehensible.