Ecom

College of Administrative and Financial Sciences

Assignment-1

Deadline: 30 September 2020 @23:59

Course Name: MICROECONOMICS	Student’s Name:
Course Code: ECON101	Student’s ID Number:
Semester: 1	CRN: 10045
Academic Year: 1441-1442

For Instructor’s Use only

Instructor’s Name: Dr. Samreen Akhtar
Students’ Grade: Marks Obtained/ 5	Level of Marks:

Instructions – PLEASE READ THEM CAREFULLY

· This Assignment must be submitted on Blackboard (WORD format only) via the allocated folder.

· Email submission will not be accepted.

· You are advised to make your work clear and well-presented; marks may be reduced for poor presentation. This includes filling your information on the cover page.

· Assignment will be evaluated through BB Safe Assign tool.

· Late submission will result in ZERO marks being awarded.

· The work should be your own, copying from students or other resources will result in ZERO marks.

· Use Times New Roman font 12 for all your answers.

Critical Thinking 1: The diamond-water paradox

In “An Inquiry into the Nature and Causes of the Wealth of Nations” published in 1776, Adam Smith wrote:

“Nothing is more useful than water: but it will purchase scarcely anything… A diamond, on the contrary, has scarcely any use-value; but a very great quantity of other goods may frequently be had in exchange for it”

Explain the diamond-water paradox and find out in the literature how economists have later solved this paradox.

ANSWER: