The water and diamonds paradox of value results from
A) the concept of deadweight loss.
B) the "law of demand."
C) diminishing marginal utility.
D) the elasticity of demand.
C
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The greater the magnitude of the absolute value of the income elasticity of demand for a good, the more the
A) demand for that good changes when income changes. B) total revenue for firms producing that good changes when income changes. C) price of the good changes when income changes. D) All of the above answers are correct.
During the housing market and financial crises of 2007 and 2008, the Fed increased the volume of discount loans in an attempt to
A) reassure financial markets and promote financial market stability. B) stabilize prices and reduce the growing inflation rate. C) eliminate structural unemployment to lower the unemployment rate. D) attract foreign investment and stabilize interest rates.