The Fact That Diamonds Have a Much Higher Price Than

question 40

Multiple Choice

The fact that diamonds have a much higher price than water

• A) violates the rules of utility maximization because water is necessary for life.
• B) does not violate the rules of utility maximization because globally, fresh water is actually very rare.
• C) does not violate the rules of utility maximization because water's marginal utility is low.
• D) violates the rules of utility maximization because diamonds are not necessities.
• E) violates the rules of utility maximization because the consumer actually consumes a large amount of water.

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Definitions:

Labor Supply Data

Information and statistics related to the number of individuals available and willing to work at different wage levels in an economy.

Marginal Product

The additional output that results from the use of one more unit of a factor of production, keeping all other factors constant.

Monopsonist

A market condition where there is only one buyer for many sellers, giving the buyer significant power over prices and terms.

Nonunion Labor Force

Employees who are not members of a labor union and do not have negotiated contracts concerning their wages, benefits, and working conditions.