The term carat refers to the weight of a diamond. One carat is equivalent to 200 milligrams. Most people mistake carat with the diamond’s size, but that is a myth. With an increase in carat size, the price of the diamond also increases, because the larger the diamond is, the rarer it is to find. Carat alone should never be your sole criteria in selecting a diamond. Combine it with the cut, clarity, and color as well. A higher-carat diamond with an improper cut may seem small to the eye, but a smaller carat, finely-cut diamond is more valuable.