Is Water a Free Good?
Read the International Food Policy Research Institute's summary of Mark Rosegrant's article on water scarcity.
Questions:
- Is water a free good or a scarce good? Why?
- Why would a higher price for water reduce the likelihood of a future water shortage?
- Water is a scarce good because there the quantity demanded exceeds the quantity supplied when the price is zero.
- A higher price would cause consumers and firms (particularly farms) to use less water. It would also provide more incentive for firms to discover new sources of water (perhaps through more efficient waste-water recycling techniques).
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A) making a normative statement. B) making a positive statement. C) testing an economic model. D) facing the standard of living tradeoff.
Critics of the U.S. definition of poverty claim that:
A. it is set too low, because of higher food prices relative to essential goods and services. B. it is set too high, because of lower food prices relative to essential goods and services. C. it is set too low, because of lower food prices relative to essential goods and services. D. it is set too high, because of higher food prices relative to essential goods and services.
Which of the following would help control the future costs of healthcare?
a. a new government program that would cover the cost of prescription drugs purchased by all healthcare consumers b. an increase in the share of healthcare expenditures financed with low co-payment insurance c. allowing consumers to purchase healthcare insurance from out-of-state providers d. an increase in the tax benefits of purchasing healthcare through one's employer
Human effort that can be applied in the production process is called:
A) natural resources. B) technology. C) labor. D) specialization.