Recently,much of the Western U

question 185

Multiple Choice

Recently,much of the western U.S.experienced a drought condition and water usage was restricted in Denver.Yet,even though most people used less water,the price of water did not drop.When the drought was declared over,the water company raised water prices.However,the residents of Denver did not use less water.Here,water is

• A)price elastic.
• B)price sensitive.
• C)price inelastic.
• D)price insensitive.
• E)unitary elastic.

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Definitions:

Resource Pricing

The determination of prices for various factors of production, including labor, capital, and natural resources, based on market dynamics.

Money-Income Determination

The process of how individual and household incomes are determined, influenced by factors such as employment, wages, and economic policies.

Demand

Demand is the quantity of a product or service that consumers are willing and able to purchase at various prices during a given period.

Resource

An economic or productive factor required to accomplish an activity, or to provide a benefit to the economy, such as raw materials, labor, and capital.