Question

cecilia has studied economics and knows about the value and investment potential of diamonds. the price of diamonds has recently decreased, and a new diamond mine has opened nearby. cecilia decides to buy a diamond necklace while the prices are lower.
how did cecilias knowledge of economics help her make a savvy commodity purchase?
she knew that diamonds are popular and in high demand.
she knew that diamonds are a nonrenewable resource, making them scarce.
she knew that the cost of diamonds depends only on the demand.
she knew that the purchase of diamonds will satisfy wants and needs.

Explanation:

Cecilia's economics knowledge lets her recognize that diamonds, as a nonrenewable resource, are inherently scarce. A new mine increasing supply temporarily lowers prices, but their scarcity means prices are likely to rise again, making this a savvy purchase. The other options are incorrect: demand alone doesn't set diamond costs, current demand isn't the key here, and satisfying wants doesn't explain the savvy economic choice.

Answer:

B. She knew that diamonds are a nonrenewable resource, making them scarce.