Economy, asked by apar2506, 1 year ago

Diamond-water controversy was given by whom and by which utility?
(a) Pigou, MU.
(b) Marshall, TU
(c) Keynes, MU
(d) Marshall, MU​

Answers

Answered by mindfulmaisel
0

The diamond-water controversy was given by Adam Smith and by Marshall MU.

Option: (d)

Explanation:

  • Water is important for people and the total utility of water is great because people are dependent on it for their survival.  
  • But according to the marginal utility, it is not the total usefulness of ‘diamonds or water’ that helps to determine the price of a commodity.  
  • Rather it is the usefulness of every ‘unit of water’ or diamond. Water is available in large supply so the ‘marginal utility’ of water is less.

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