In 1985 a Desert Community Stopped Pumping from a 1000

question 19

Multiple Choice

In 1985 a desert community stopped pumping from a 1000 foot well because it had run dry.In 2005 the price of water doubled.The community then drilled the well deeper and started pumping again.In this community,

• A)the supply of water is perfectly inelastic because it is a finite resource.
• B)water production faces increasing opportunity costs.
• C)markets cannot reach equilibrium because there is a persistent shortage of water.
• D)higher water prices can reduce quantity demanded,but cannot increase quantity supplied.

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Definitions:

Categorical Data

Data that can be divided into groups or categories that do not necessarily have a logical order.

Numeric

Pertaining to numbers; involving or constituting numbers.

Time Series

A sequence of data points collected or recorded at successive times, usually at uniform intervals.

Cross-Sectional

A type of study or analysis that examines data from a population at one specific point in time.