Paradox of Value
Put forth by Adam Smith in “The Wealth of Nations”, the paradox of value tries to explain why luxuries such as diamonds are incredibly expensive, whereas goods such as water which are critical to the survival and existence of human being are so cheap. The real question here is that why such items, luxuries like gold and diamonds, which do not even have high levels of demand are priced so much more than the necessities of everyday life. One of the approaches to answer this paradox is that the true value of an item is not determined just by the...