If a good which is important for welfare sells for a lower price than one which is less important for welfare, we are describing:
A)an inferior good.
B)marginal consumer surplus.
C)the paradox of value.
D)the substitution effect.
E)total utility.

Question

Quizplus · Accepted Answer

The paradox of value, also known as the diamond-water paradox, explains that things with little or no water value, like diamonds, can be expensive while things with high water value, like water, can be much cheaper. This is because the value of something is not determined solely by its usefulness but also by its scarcity and availability. Therefore, a good that is important for welfare but sells for a lower price than one which is less important for welfare is an example of the paradox of value.

If a Good Which Is Important for Welfare Sells for a Lower