This is the solution to the diamond-water paradox: Those things that have high value in use sometimes have low prices because they are consumed at low utility; those things that have low value in use sometimes have high prices because they are consumed at high utility.

The Diamond-Water paradox states that sometimes the goods with low value in use have a relatively high price while goods with high value in use have relatively low price.

Water is a necessity but it has low price while diamonds are luxury goods but have high price.

This is because water has low marginal utility while diamonds have high marginal utility.

This is the solution to the diamond-water paradox: Those things that have high value in use sometimes have low prices because they are consumed at low __________ utility; those things that have low value in use sometimes have high prices because they are consumed at high __________utility.

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This is the solution to the diamond-water paradox: Those things that have high value in use sometimes have low prices because they are consumed at low utility; those things that have low value in use sometimes have high prices because they are consumed at high utility.