Early settlers in the town of Dry Gulch drilled wells to pump as much water as they wanted from the single aquifer beneath the town. (An aquifer is an underground body of water.) As more people settled in Dry Gulch, the aquifer level fell and new wells had to be drilled deeper at higher cost. The residents of Dry Gulch will overuse water relative to the social optimum because Multiple Choice each resident will fail to adequately consider the external cost of his or her own water use water is a scarce resource each resident will fail to adequately consider the external benefit of his or her own water use the marginal cost of water is increasing
Early settlers in the town of Dry Gulch drilled wells to pump as much water as they wanted from the single aquifer beneath the town. (An aquifer is an underground body of water.) As more people settled in Dry Gulch, the aquifer level fell and new wells had to be drilled deeper at higher cost. The residents of Dry Gulch will overuse water relative to the social optimum because Multiple Choice each resident will fail to adequately consider the external cost of his or her own water use water is a scarce resource each resident will fail to adequately consider the external benefit of his or her own water use the marginal cost of water is increasing
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter14: Environmental Economics
Section: Chapter Questions
Problem 2SQ
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![Early settlers in the town of Dry Gulch drilled wells to pump as much water as they wanted from the single aquifer beneath the town.
(An aquifer is an underground body of water.) As more people settled in Dry Gulch, the aquifer level fell and new wells had to be
drilled deeper at higher cost. The residents of Dry Gulch will overuse water relative to the social optimum because
Multiple Choice
each resident will fail to adequately consider the external cost of his or her own water use
water is a scarce resource
each resident will fail to adequately consider the external benefit of his or her own water use
the marginal cost of water is increasing](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0e363615-959a-49c2-8bf8-88045de324b3%2Fe4f01ba8-a58e-4b53-9c53-d51b54de8351%2Fkrg5wvb_processed.png&w=3840&q=75)
Transcribed Image Text:Early settlers in the town of Dry Gulch drilled wells to pump as much water as they wanted from the single aquifer beneath the town.
(An aquifer is an underground body of water.) As more people settled in Dry Gulch, the aquifer level fell and new wells had to be
drilled deeper at higher cost. The residents of Dry Gulch will overuse water relative to the social optimum because
Multiple Choice
each resident will fail to adequately consider the external cost of his or her own water use
water is a scarce resource
each resident will fail to adequately consider the external benefit of his or her own water use
the marginal cost of water is increasing
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