The diamond-water paradox arises because essential goods may be cheap while nonessential goods may be expensive.
<h3>What do you mean by diamond-water paradox?</h3>
- The dilemma of value, also referred to as the diamond-water paradox, describes the significant disparity in cost between some important items and non-essential ones.
- In a market economy, the cost of many necessities for human life is significantly lower than the cost of less necessary necessities.
<h3>Why does the paradox of value between diamonds and water arise?</h3>
- Water is clearly more valuable as a scarce resource than the luxury of having a diamond.
- Customers are forced to decide whether to buy one more diamond or one more unit of water as demand rises.
- The concept of marginal utility describes this idea.
<h3>Why is marginal utility for diamond High?</h3>
- Diamonds, Due to the limited availability of diamonds, people are likely to operate near the vertical axis, somewhat high on the marginal utility curve.
- In other words, the amount consumed is not that large.
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Answer :
$1,099.54
Explanation :
As per the data given in the question,
Face value = $1,000
Coupon rate = 8% per year paid semi annual
Time = 6 year × 2 = 12 semiannual period
Coupon payment = 8% × $1,000 × 0.5
= 40
Market interest rate = 6% compounded semiannually is 3% semi annual period
Present value of bond = $40 × (P/A , 3%, 12) + $1,000 × (P/F , 3%, 12)
= $40 × 9.9540 + $1,000 × 0.7013798802
= $398.16 + $701.38
= $1,099.54
We simply applied the above formula
Answer:
Post hoc, ergo propter hoc.
Explanation:
The best statement which explains the above scenario is 'post hoc, ergo propter hoc'. This statement is known as an informal fallacy, according to this statement because burglaries were followed by an increase in ice-cream sales then it means that an increase in ice-cream sales is the cause of burglaries. In other words, if 'y' is followed by 'x' then 'x' must have caused 'y'.
