Question

According to the​ diamond-water paradox, the total uitlity of water is​ ________ the total utility derived from​ diamonds, and the marginal utility of the last unit of water consumed is​ ________ the marginal utility of the last diamond consumed.

Answer 1

Answer:

According to the diamond-water paradox, the total utility of water is lower the total utility derived from diamonds, and the marginal utility of the last unit of water consumed is greater than the marginal utility of the last diamond consumed.

Explanation:

Both total utility and marginal utility are concepts that in economy defend the value related to a good or product. The increase in total utility is a function of the increase in marginal utility.

The diamond and water paradox is based on the simple fact that water is important for life, but its monetary value is low, compared to diamond, which has a high monetary value can be exchanged for other services, but It is not necessary for life.

• In terms of monetary value, water has a low value because it is always available, which causes its marginal utility to be low. It is not useful as an exchange currency for other services.
• Diamond has a high marginal utility, because it is a valuable mineral and there is a limited amount of them.

In the hypothetical case that water becomes scarce, its marginal value would increase -as well as its total utility- even above the marginal value of any product, including diamond.

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Marginal utility https://brainly.com/question/4192176