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.
d
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In a market socialist economy
a. Resources are allocated by the market b. Property is owned by the state or by collectives c. Information is centralized d. There are no public choices e. Both a and b
A price index measures:
A. the average price of a given class of goods or services relative to the price of the same goods and services in a base year. B. the price of specific good or service. C. only the prices that change. D. the change in the price of a specific good or service.