Explain the diamond-water paradox and find out in the literature how economists have later solved this paradox.

I’m trying to learn for my Economics class and I’m stuck. Can you help?

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.

Guidelines for the assignment:

  • Use font Times New Roman, 12 font size Use 1.5 line spacing with adjust to all paragraphs (alignment).
  • Ensure that you follow the APA style in your project and references.
  • Not less than 200 words
  • Plagiarism is forbidden