TED-ED: The paradox of value - Akshita Agarwal

The video explores the paradox of value, illustrating how value is context-dependent using a game show and desert scenario. It introduces the concept of utility, explaining how it unifies exchange and use value. The video further delves into marginal utility and the law of diminishing returns, showing how these concepts influence decision-making. Finally, it discusses maximizing utility and emphasizes that value originates from individual needs and choices.

In the context of the paradox of value, why might a bottle of water be more valuable than a diamond in the desert?

• Because water is heavier to carry.

• Because water has a higher exchange value.

• Because water has a higher use value in that situation.

• Because diamonds are not shiny in the desert.

What does the concept of utility attempt to unify?

• The cost of production and selling price.

• The exchange value and use value of an item.

• The color and texture of an item.

• The weight and size of an item.

How is utility reflected in a market economy?

• By the amount of money people are willing to pay.

• By the size of the product.

• By the number of items produced.

• By the color of the product.

What does the law of diminishing marginal utility state?

• The more you have of something, the more you want it.

• The more you have of something, the less useful each additional unit becomes.

• The less you have of something, the less you want it.

• The less you have of something, the more expensive it becomes.

Why might someone stop buying more of their favorite food even if they can afford it?

• Because they run out of money.

• Because the marginal utility of additional servings decreases.

• Because the food becomes more expensive.

• Because the food becomes less tasty.