passwella.
Menu

JAMB Economics 1988 Question 5

Question 5

Basic Concepts

Air is essential to life but commands no price! Diamond is not essential to life but commands a high price! This is the paradox of

  1. A.thrift
  2. B.value
  3. C.abundance
  4. D.scarcity.
Show the answer and explanation

Answer: B (value)

Explanation

This is the paradox of value (water-diamond paradox): price depends on scarcity and marginal utility, not on how useful a thing is in total.