|
|
DIAMOND-WATER PARADOX: The perplexing observation that water, which is more useful than diamonds, has a lower price. If price is related to utility, how can this occur? This paradox was first proposed by classical economists in the 19th century and was subsequently used as a stepping stone for developing the notion of marginal utility and the role it plays in the demand price of a good. The paradox is magically cleared up with an understanding of marginal utility and total utility. People are willing to pay a higher price for goods with greater marginal utility. As such, water which is plentiful has enormous total utility, but a low price because of a low marginal utility. Diamonds, however, have less total utility because they are less plentiful, but a high price because of a high marginal utility.
Visit the GLOSS*arama
|
|
|
|
|
BARTER A method of trading goods, commodities, or services, directly for one another without the use of money. Barter was the first type of market exchanged undertaken by human civilization as people advanced beyond self sufficiency in the satisfaction of their wants and needs. Modern economies still use a modest amount of barter to allocate resources. The key to a barter exchange is a double coincidence of wants, in which each side of the exchange wants what the other side has and has want the other side wants. A barter exchange tends to be less efficient that exchanges involving money.
Complete Entry | Visit the WEB*pedia |
|
|
BLACK DISMALAPOD
[What's This?]
Today, you are likely to spend a great deal of time at a dollar discount store seeking to buy either a flower arrangement with daisies and carnations for your uncle or a coffee cup commemorating next Thursday. Be on the lookout for poorly written technical manuals.
Your Complete Scope
This isn't me! What am I?
|
|
|
Lombard Street is London's equivalent of New York's Wall Street.
|
|
|
"How we spend our days is, of course, how we spend our lives. " -- Annie Dillard, essayist
|
|
BA
Bank Acceptance
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
