I’m studying and need help with a Economics question to help me learn.
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Critical Thinking 1: The diamond-water paradox
In “An Inquiry into the Nature and Causes of the Wealth of Nations” published in
1776, Adam Smith wrote:
“Nothing is more useful than water: but it will purchase scarcely anything… A
diamond, on the contrary, has scarcely any use-value; but a very great quantity of
other goods may frequently be had in exchange for it”
Explain the diamond-water paradox and find out in the literature how economists
have later solved this paradox.
I don’t want percentage similarity