The High Price of Diamonds Relative to the Price of Water

question 40

Multiple Choice

The high price of diamonds relative to the price of water is due to the fact that

• A) total benefits from water are relatively low.
• B) total benefits from diamonds are relatively high.
• C) marginal benefits from water are relatively high.
• D) marginal benefits from diamonds are relatively low.
• E) none of the above is true.

---

Definitions:

Labor Cost Variance

The difference between the actual labor costs incurred and the standard labor costs for the actual production achieved; it is used for monitoring labor performance.