Why are diamonds more Expensive than water ?
The value of anything depends on the margin—the edge, the addition (or subtraction) to value. The margin is what happens next. The most difficult decisions we confront are marginal decisions. For instance, few of us waste any time deciding whether or not we have to work; the question is should we work more or fewer hours? If you were to pile straws onto the back of a camel, eventually the camel’s back would break. It might seem reasonable to blame all the straws, but if straws could talk (and think) they would blame the marginal straw—that is, the last one. After all, everything was fine before he got there. Value depends entirely upon the utility—a measure of pleasure or satisfaction—the customer will receive. Where psychiatrists speak of subjective well-being, economists use the term utility. Each are conveying the same idea: you engage in activities you receive pleasure or satisfaction from, not because others have toiled. People do not smoke to make the tobacco companies rich and h
pohnpei397 Teacher Community / Jr. College eNotes Editor Best answer as selected by question asker. Economically speaking, diamonds are more expensive than water because of supply and demand. In this case, it’s more because of supply than because of demand. You might expect that water should cost more because people have to have water and they don’t have to have diamonds. So the demand for water should be high. But there is so much water around that it is relatively cheap. Diamonds, by contrast, are pretty rare. Since the supply of them is so low, their prices are high. But if water became scarce, its price would be really high too. Rate answer: $(‘#aScore-135429’).istars(setAnswerRating); Flag as inappropriate Posted by pohnpei397 on Monday November 16, 2009 at 1:33 PM readerofbooks Teacher Doctorate eNotes Editor Best answer as selected by question asker. I can see your logic here. If diamonds do nothing for people, apart from making them feel good (some people at least), and water i
