Original sentence: A result of this theory is that the disparity in value between water and diamonds is dependant on their relative scarcities, and that in a situation where the ubiquity of water was reduced, or less possibly that of diamonds increased, their relative values would more closely reflect their necessity.Adam Smith, the esteemed and perhaps most famous of economists, described the paradox in his seminal work The Wealth of Nations.Anne Robert Jacques Turgot rewieved the paradox in terms of marginal utility.Diamonds, however, are very scarce to the individual, so their marginal utility is relatively high (scarcity theory of value).Her theory maintained that since water is plentiful, extra water provides very little additional satisfaction to an individual, so his or her marginal utility of additional water is low.It followed that diamonds are expensive because it requires a lot of labour to find and mine them (labor theory of value).Smith concluded his that the economic value of something was dependant on the amount of labor required to attain it
Edited sentence: Adam Smith coined the paradox and came up with the wrong answer.Anne Robert Jacques Turgot solved the paradox with marginal utility.Diamonds, however, are very scarce to the individual, so their marginal utility is relatively high.He decided that the value of something may depend on how hard it it is to get.His theory was that diamonds are expensive because it takes a lot of labour to find them and mine them (labor theory of value).Now, if you are in the desert, the marginal utility of water becomes very high while the marginal utility of diamonds drops (or even becomes negative since you must carry the diamonds with you).Since water is plentiful, an extra liter of water provides very little additional satisfaction to an individual, so his marginal utility of another liter of water is low.The labor theory of value is incapable of explaining this paradox