Question

diamonds are more expensive than water because
markets do not always reflect value.
they have fewer uses.
they yield higher marginal utility.
they yield higher total utility.
all of the above
question 2
we would expect the total utility of water to be high but its marginal utility to be low. why?
because water is a fluid and we dont need fluids to live as much as we need food.
because we need water to live and there is so much of it.
because we need water to live and there is very little of it.
because waters price is low.

Explanation:

1. For the first question, diamonds are more expensive because they yield higher marginal utility. Marginal utility is the additional satisfaction from consuming one more unit. Water is abundant, so its marginal utility is low despite high total utility. Markets generally reflect value based on marginal utility. Diamonds are scarce, increasing their marginal utility and price.
2. For the second question, water is essential for life, so total utility is high. However, it is abundant, meaning that each additional unit (marginal) provides less additional satisfaction, thus marginal utility is low.

Answer:

1. C. they yield higher marginal utility.
2. B. Because we need water to live and there is so much of it.