Question

the diamond - water paradox is the observation that

• those things that have the greatest price often have little value in exchange and those things that have the lowest price often have the greatest value in exchange.
• those things that have the greatest value in use often have little value in exchange and those things that have little value in use often have the greatest value in exchange.
• those things that have the least value in use often have little value in exchange and those things that have the greatest value in use often have the greatest value in exchange.
• those things that have the least price often have little value in exchange and those things that have the greatest price often have the greatest value in exchange.

question 4
1 pts
suppose that in the year 2050, one gallon of water is more expensive than a one - carat diamond. what could explain this?

• the supply of diamonds is ample in 2050.
• people dont appreciate diamonds any more. in other words, the demand for it fell dramatically.
• the supply of water decreases dramatically, so its price increases to a very high level.
• all other explanations are possible.

Explanation:

The diamond - water paradox states that things with great use - value often have low exchange - value and vice - versa. For the first question, this is the key concept. For the second question, a significant decrease in water supply would increase its price. A simple diamond supply doesn't directly explain the water - diamond price reversal, and a sudden drop in diamond demand is not the most likely main factor compared to water supply change.

Answer:

Question 3: Those things that have the greatest value in use often have little value in exchange and those things that have little value in use often have the greatest value in exchange.
Question 4: The supply of water decreases dramatically, so its price increases to a very high level.