When Water Cannot Be Traded Among Current and Potential Users

question 92

Multiple Choice

When water cannot be traded among current and potential users, then

• A) each user will take more care to conserve, because added water cannot be obtained.
• B) users have a strong incentive to conserve because they are now protected from price increases imposed by greedy entrepreneurs.
• C) efficiency improves, as dry years can be better anticipated and planned for, and every user knows the quantity that will be available.
• D) water will not flow to its highest valued uses, and some users will use water for relatively low-valued uses, because they cannot gain by selling it to others.

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Definitions:

Feasibility Study

An assessment of the practicality and potential success of a proposed project or business, analyzing variables such as cost, risk, and benefits.

Action

A process or act of doing something, usually to achieve an intended outcome or goal.

Detailed Financial Projections

Comprehensive forecasts about a company’s future financial status and performance over a period of time.

Entrepreneurial Activities

Actions aimed at initiating, designing, launching, and running a new business or enterprise, often in the face of financial risk.