- Give three possible solutions to the environmental issue you are investigating.
Possible solutions are a water agreement with other places, water heaters, or water limits. - Why would some people oppose the solutions you have chosen?
People may oppose a water agreement because they don't like the idea of having to share water and if both places run out then we have no water. They may oppose water heaters because it will cost them more money, and they may oppose a water limit because they will need to prioritize what they can use their water on. - What positive or negative externalities does this issue present at each sector of the economy? Refer to your circular-flow diagram.
Government: Will be spending more money. Households: Also cost more. Business: Getting more business. Rest of World: They will get more water from sharing. Product Market: Paid more money. Factor Market: Won't get as much money if there isn't enough water. Financial: Government will pay them for services. - What incentives do individuals, businesses, and government have to act on each possible solution?
They have to think about pricing. - What are the externalities, both positive and negative that could result from each possible solution?
Water agreement: We get their water if we need it, but they can also take ours.
Water heater: Get hot water faster but will have to pay for it.
Water limit: Will save water and everyone gets the same but you may not get to use water for certain things.