Silver is now selling at $17.62 an ounce, while bottled water is selling at about $0.04...
Silver is now selling at $17.62 an ounce, while bottled water is selling at about $0.04 per fluid ounce. However, water is essential to life, while silver is not. Use utility analysis to explain why the two goods have such different prices. (3-4 Sentences explaining please)
Homework Answers
Water is abundantly available, plentiful and easily accessible.Silver,however is rare in existence which makes it more value,causing the marginal utility derived from buying a silver more than the marginal utility derived from drinking a class of water.
People choose to pay more for goods with higher marginal utility, causing the price of silver to be higher than the price of water.
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Silver is now selling at $17.62 an ounce, while bottled water is
selling at about $0.04...
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Please help thanks!
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