Carat is the unit of measurement used to weigh diamonds. One carat is the equivalent of 200 milligrams, or 0.2 grams. The word carat is derived from carob seeds that owing to their very slight weight-variance, were used to balance scales in ancient times.
Due to the processes involved in the formation of nature, large diamonds are created less frequently then smaller sized diamonds. Due to the rarity of larger sized diamonds they command substantially higher prices than smaller sized diamonds. For instance, a one carat diamond will cost more than two half carat diamonds of equal colour, clarity and cut.
However the weight of a diamond is but one of the factors used to value a diamond, and it should be understood that two diamonds of equal weight may have very different values, depending on their cut, clarity and colour. In fact, a smaller but perfectly cut diamond of whiter colour and flawless or near-flawless clarity can be more valuable than a larger diamond with a weaker shade of white and less clarity.