The water diamond paradox was firstly resolved with the help of:
Labor theory of value
Individual theory of value
Producer theory of value
Consumer theory of value
Correct Answer :
A. Labor theory of value
The paradox of value (also known as the diamond-water paradox) is the apparent contradiction that, although water is on the whole more useful, in terms of survival, than diamonds, diamonds command a higher price in the market. The philosopher Adam Smith is often considered to be the classic presenter of this paradox The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. Hence, Smith denied a necessary relationship between price and utility. Price on this view was related to a factor of production (namely, labor) and not to the point of view of the consumer. Proponents of the labor theory of value saw that as the resolution of the paradox. The labor theory of value has lost popularity in mainstream economics and has been replaced by the theory of marginal utility.
Related Questions
An exceptional demand curve is:
Downward sloping
Upward sloping
Horizontal straight line
Vertical straight line
If a ten percent increase in price causes a ten percent reduction in quantity demanded, elasticity of demand is:
Perfectly elastic
Elastic
Unitary elastic
Inelastic
The general form of Cobb-Douglas production function is:
Decrease in demand results in:
Upward shift in demand curve
Downward shift in demand curve
Movement on the same demand curve
No movement or shift at all
Who is the author of Trade Cycle ?
R.Nurkse
R.C.Mathews
W.A.Lewis
K.N.Raj
7.The costs which the firms have to face in order to change the price tags of their products and services are called:
Product costs
Real costs
Menu costs
Nominal costs
The Hicksian demand curve includes:
Substitution effect
Income effect
Both substitution and income effect
None of them
The Modern and Neo-Keynsian Theory of Interestwas presented by:
Gunner Myrdal
A.C.Pigou
J.M.Keynes
J.R.Hicks
The shape of the TC curve is:
U
V
P
S(inverted)
The substitution effect works to encourage a consumer to purchase more of a product when the price of that good is falling because:
The consumers real income has increased
The consumers real income has decreased
The product is now relatively less expensive than before
Other products are now less expensive than before
In an indifference curve diagram, when the price of a product increases, the decline in quantity demanded that results if consumers utility or welfare is kept constant is referred to as the:
Utility effect
Budget line effect
Substitution effect
Income effect
One common definition of a luxury good is a good with income elasticity:
Greater than one
Equal to one
Less than one but more than zero
None of the above
Who is the founder of classical school of thought?
David Ricardo
Adam Smith
T.R.Malthus
J.S.Mill
Which of the following goods is most likely to be exchanged in a market of local rather than national scope?
University professors
Computer components
Building materials
Jet airplanes
For monopolistic competitive firm:
P=AR and P>MR
P
P=MC and MC=AC
None of the above
The water diamond paradox was firstly resolved with the help of:
Labor theory of value
Individual theory of value
Producer theory of value
Consumer theory of value
Total fixed costs are:
At a point above the middle of a straight line demand curve, elasticity of demand is:
Less than one
Equal to one
More than one
Equal to infinite
Marginal revenue from a given output:
The price at which the marginal unit sells
Total revenue sale of all units divided by volume of sales
Average revenue of total output average revenue of last unit
The change in total revenue resulting from the sale of one unit more of output
The slope of an iso-quant represents:
MRS
MRT
MRTS
MRPS
According to translog production function, elasticity of substitution is:
Greater than one
Less than one
Zero
Equal to one
In case of monopoly:
MR
MR>AR
MR=AR
AR=0
Average cost means:
Cost of the average units
Cost of the last units of average
Cost of the unit of production
Total cost marginal cost
In economic term water is a:
Free good
Economic good
Both of the above
None of the above
Which of the following is an implicit cost of production?
Wages of the labor
Charges of electricity
Interest on owned money capital
Payment for raw materials
If the demand for good is more elastic and government levied a tax per unit of output, the price per unit for the firm would:
Rise by the amount of the tax
Rise by more than the amount of the tax
Rise by less than the amount of the tax
Remain the same
With an increase in income, consumer is expected to buy more of:
An inferior good
A giffen good
A normal(or superior) good
None of the above
We can find total utility by:
Multiplying the number of unit by its marginal utility
Adding up the marginal utility of all units
Multiplying price by number of units
None of the above
If a monopolist is producing under decreasing cost conditions, increase in demand is beneficial to the society because:
Consumers get better quality goods
Cost of production falls and hence price will follow
Goods will be sold in many markets
None of the above
An inferior commodity is one whose quantity demand decreases when income of the consumer:
Decreases
Increases
Remains constant
Zero