Discussing marginal utility and ‘Diamond - Water Paradox'.
In the figures below you are given the demand curve for diamonds and the demand curve for water. This permits you to explain the famous "Diamond-Water Paradox" that confused even the great Adam Smith, founder of modern economics. That is, use these demand curves, and appropriately palced price lines for diamonds and for water, to show which value of water is greater than the value of diamonds while the price of diamonds is greater then the price of the water.
