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 Cecilia’s knowledge of economics help her make a savvy commodity purchase?

Diamonds are nonrenewable, so their supply is limited and they can become scarce over time. Cecilia can use that knowledge to see why diamonds may have investment value, while the recent price decrease makes buying one more attractive. Choice B, “She knew that diamonds are a nonrenewable resource, making them scarce,” best explains her decision.

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