How can it be that water, which is essential for life and therefore a "valuable" a thing as can be imagined, is so inexpensive relative to diamonds, which are used for nothing but decoration (and some non-essential uses such as cutting)?
Shouldn't a bucket of water be worth a few dozen diamonds?
2006-12-10 16:34:11 · 7 answers · asked by The Prince 6 in Social Science ➔ Economics
a lot of people are talking about how rare diamonds are. This is just silly what you have to understand is that diamonds are in fact one of the most abundant gemstones. The reason that they are so highly priced is that it was forever before anyone realized where they all were. In south Africa the things just lay around on the ground. they are frickin everywhere, but diamonds are one big monopoly because the nice folks at DeBeers own 98% of the diamonds in the world and therefore are able to dictate supply and set their own prices.
Water is cheap because it is absolutely everywhere. You are more than 70% water. The air around you at this very moment has tons of water in it. So yes water is more abundant than diamonds so it is cheaper, but diamonds are more abundant than anyone really knows.
2006-12-10 16:53:42 · answer #1 · answered by Anonymous · 2⤊ 0⤋
Simple -- and this has never been a paradox. I don't know why economics teachers keep up with that crap. Price is not based on how necessary something is for life, it is based on the intersection of supply and demand. Markets naturally find a clearing price at which both suppliers and consumers are satisfied with the trade and are better off for making the trade.
If there is demand, and if the supply is not infinite and freely obtainable but instead is constrained, there will be a price. Water is available to users in abundance, so it is cheap. Diamonds are more scarcely available.
It doesn't matter WHY there is demand -- I could care less about those dumb rocks myself -- it only matters that for whatever reason the IS demand. At least water usually costs something because supply is constrained due to distribution of it -- air is more urgently needed than water, and it's totally free.
2006-12-11 04:38:57 · answer #2 · answered by KevinStud99 6 · 0⤊ 0⤋
A commodity is only 'valuable' if it is absolutely essential for life, or is relatively rare, OR if the supply of that commodity is highly controlled, ie. maintaining an artificially HIGH price and demand by controlling the market and advertising to create 'need' for it.
Water is FAR more valuable than diamonds because it supports LIFE, however, the diamond cartels (DeBeers, etc) control the flow of diamonds and promote their 'luxury'.
If you had absolutely NO water, a bucket of water would be worth an awful lot more than a FEW diamonds.
2006-12-11 01:38:26 · answer #3 · answered by fiddlesticks9 5 · 0⤊ 0⤋
It would be worth a lot more than a bucket of diamonds IF thats all the water there was in existence. Because there is so much of it compared to the quantity of diamonds is why its so cheap.
2006-12-10 16:41:21 · answer #4 · answered by Haven17 5 · 0⤊ 0⤋
Water is relatively less scarce than diamonds. Also diamonds are considered a comodity while water is considered a basic need which means most goverments will try to get water to its people at affordable prices.
2016-03-29 02:46:50 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Water is abundant. Diamonds are rare. Lacking any other form of currency, we've resorted to rare physical objects which come with somewhat of assurance against someone finding a ton of em and owning the market.
2006-12-10 16:40:06 · answer #6 · answered by Tyrone 2 · 1⤊ 0⤋
good question... make a fortune in the deep desert with a lemon aide stand...yet.!!. we waste so much .. before we quench that thirst ...mmm
2006-12-10 16:40:21 · answer #7 · answered by david 2 · 0⤊ 0⤋