Question 2

The price of bottled drinking water is low while the price of a jade stone is high, but bottled drinking water is essential to life whereas jade stones are mostly used for people to join grand parties. In general, how can valuable bottled drinking water be so cheap while a relatively useless jade stone is so expensive? Assume that you are in desert, the bottled drinking water will be very valuable and important to you while the jade stones are comparatively worthless. Please use utility concepts to explain the above situations. (33 marks)