Due to ongoing drought conditions, many cities in Texas have implemented water conservation measures which prevent homeowners from watering their lawns more than two times per month. Prior to the drought conditions, no restrictions were in place
Discuss this measure from the villain/victim standpoint. Explain who the villains and victims are, and if they really are villains and victims?
The "villains" are those people who use "too much" water on their lawns, and the "victims" are those people who want to use the water for other things. This is actually just a dispute over the best use of a resource between people with competing preferences. As a result of the restrictions, people have dry, brown lawns and dying shrubs in their gardens. Without the restrictions, other people may not have been permitted to wash their cars or keep their swimming pools filled. Much of this dispute could be avoided if water were priced in the marketplace instead of by municipalities, as that would direct water to its most valued uses and encourage conservation.
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Suppose you observe an increase in the equilibrium price of coffee and a decrease in the equilibrium quantity of coffee. Of the options listed below, this is most consistent with:
A. a decrease in the cost of producing coffee. B. an increase in consumer income assuming coffee is a normal good. C. an increase in the cost of producing coffee. D. a decrease in consumer income assuming coffee is a normal good.
Monopolistic competition tends to lead firms to have wasted capacity. Why?
What will be an ideal response?
The United States is capable of producing many goods and services that it imports, but it does not because
A. We have lost those skilled workers. B. We can export goods that we specialize in. C. We produce those goods more cheaply if we make them ourselves. D. We can import those goods at a lower opportunity cost than if we make them ourselves.
________ means that government sets the rules for market competition.
A. Market dynamics B. Market regulation C. Market economics D. Government metrics