Read the summary and the most important questions on Water Economics

• 1 Week 1

• 1.2 Supply and demand

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• What are causes for a shift in supply curve? (5 things)

  1. Technological change
  2. Labour costs change
  3. Capital costs change
  4. Fiscal interference
  5. Number of producers on the market

• What is Adam Smiths theory?

  Maximization of individual welfare contributes to maximization of social welfare.

• What is the Pareto optimal?

  A situation where no individual can be better off without making at least one individual worse of.

• 1.3 Public Goods and water suppy

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• What are specific characters of water? (6 things)

  1. It's essential
  2. Non-substitutable
  3. A flux
  4. Varying availability and quality
  5. Difficult to transport
  6. Not a homogenous market

• What is the diamond-water paradox?

  How can it be that an essential resource like water has a much lower price per unit weight or volume than diamonds?

• How is the value of water determined?

  By its scarcity

• What do marginal values represent?

  The change in value as a result of moving to the next unit of consumption or production.

• What do net values represent?

  The difference between two levels of benefits or between benefits and costs in a particular situations (cba).

• What are examples of variable costs of water supply?

  Costs for pumping, purification, decontamination, transportation

• What are examples of supply enhancement strategies?

  1. Build dams
  2. Drill wells
  3. Repair leaky infrastructure
  4. Build desalinization plants