In the 1970s there was a long draught in California that left a large section of Southern California parched
As water prices began to soar how do you think most residents changed their consumption of water? What kinds of water consumption probably did not change and why? Make sure to use utility in your explanation.
Most people probably either eliminated or reduced drastically the washing of cars, the watering of lawns and maybe even the filling of swimming pools. But the drought probably did not have much of an impact on internal consumption, bathing or the brushing of teeth. The items that were curtailed were no doubt those that provided the least amount of marginal utility.
You might also like to view...
Suppose there are 3 voters in a legislature, and two projects are up for consideration. Project A creates benefits of 3 for district 1 but benefit of -1 in district 2 and -3 in district 3. Project B creates benefits of 3 in district 2, -1 in district 1 and -3 in district 3. a. Would either of these projects be implemented under simple majority rule voting (where each project is approved or not approved on its own)?
b. How would your answer to (a) change if the projects can be bundled? c. Is it efficient to fund these projects? d. Suppose the Coase Theorem applies to legislatures -- i.e. suppose legislators can create alternatives with cash side-payments. What might voter 3 do to prevent the outcome in (b)? e. True or False: If transactions costs are low and side-payments are allowed, only efficient projects will pass under vote trading. What will be an ideal response?
People are most likely to make their opinions on a potential piece of legislation known to their representatives when
A) the legislation matters greatly to them, whether or not it affects their private interests. B) the legislation will affect their private interests substantially. C) they believe their actions will make enough difference to justify the effort. D) they can do so at low cost to themselves.
The long-run average cost curve shows
A) the average cost of producing where diminishing returns are not present. B) the plant size or scale that the firm should build. C) the lowest average cost of producing every level of output in the long run. D) where the most profitable level of output occurs.
By integrating vertically,
a. firms trade with one another through markets b. firms trade with one another through government intermediation c. firm and market processes are connected to produce a good or service most efficiently d. the various procedures involved in producing a good are collected within one firm e. the various procedures involved in producing a good are parceled out among various contractors