Question 20 / 21:
Water is necessary for life, but restaurants give it away for free.Diamonds are mere décor, serving only vanity, but they cannot be had cheaply.
Explain this so-called "water-diamond paradox."
People evaluate goods on the margin. No one chooses between
all the water in the world and all the diamonds. Diamonds are
much scarcer than water, because their total supply can't satisfy
all the desires for it, but water is relatively much more plentiful.
Sample Partial Credit Answer
There is more water than diamonds
