You've been given a lot of advice here. Some good, some super cynical, some just terrible. Here's what you really need to know:
1) Diamonds are NOT a financial investment! Don't ever listen to that crap. Your wife will wear it all of her life and then most likely hand it down to one of your children. The actual cash outlay will never come back. Also, God forbid, you get divorced, the ring will net maybe half of what you paid, assuming you even get it back. But, on a more positive note, a nice engagement ring may well be an investment in a happy marriage. Most but not all women like engagement rings, and have expectations on what is appropriate. Don't start off your life together by being cheap and in effect telling her she's just not that important in the overall scheme of things.

2) Find out what your wife likes by doing some casual window shopping with her in various jewelry stores. Have her try on a few different designs and styles. Don't go out and buy something only to find out she HATES it! You may also find she prefers a different stone than diamond, or a certain cut or setting, or actually prefers a smaller stone for one reason or another. Feel out her preferences. Then go back later and buy what she really wanted and pick a time and place to surprise her with it.

3) Spend enough money. This will depend on your financial circumstances, what your wife thinks is nice, and possibly what her friends have already received. Don't be the cheapass who makes good money but bought his wife a diamond chip when all of her friends have a 1 carat solitaire. Your future wife should have a really nice ring that she will be proud of. Within reason of course. If you are afraid to spend a lot on her, and you can of course afford it, maybe you're marrying the wrong woman. If you are thinking buying her a nice ring will cut in on the amount of money you can spend on pinballs, maybe SHE is marrying the wrong man!

4) I have been happily married for 24 years to a woman most men would give a kidney to be with. I have found as long as I make sure she gets whatever she really wants (within reason again), she never questions what I buy in the way of pinballs or other hobbies. Or, happy wife, happy life. Way back when before we were married, my wife saw a marquis shaped diamond that really blew her away in a local store. It was a little over a carat, good clarity and color, and cost something around maybe $6k at the time, give or take. She loved it, was the envy of her friends, I could reasonably afford it at the time, and I have never regretted the decision since.

5) Whatever you do, don't....do NOT... try to buy your wife a synthetic diamond and pass it off as the real deal!! That is just pathetic and unbelievably cheap! And she will sooner or later find out. That is something you will never, ever live down! There are basically only a handful of occasions in life where the time, place and details will be remembered forever. Your engagement is one of those. Make it as memorable as you can.

The point is to try to understand what your woman likes and then help her to realize her wants and desires. Some women love jewelry, some flowers, some just your undivided attention. Whatever makes her happy should be your goal.

It should go without saying, but perhaps it needs to be said apparently, if you do not love cherish, honor and respect your wife and remain faithful to her, nothing else really matters, does it? All the flowers and jewelry in the world isn't going to make up for that.

The op's original question was to attempt to identify a reasonable amount to spend on his soon to be fiancée's engagement ring. And how to figure out what she might like best. Not to debate the relative resale value of used jewelry, the Debeers corporation, or the many ways women can screw over men if they have a mind to. In response to his original question, he's been given reasonably good advice from a number of people here.