5. Do environmental goods have demand curves? Consider drinking water. In many p
ID: 3282085 • Letter: 5
Question
5. Do environmental goods have demand curves? Consider drinking water. In many places in the world, water supplies carry some risk to those who drink it, due to both natural and anthropogenic (human-caused) effects. The water carn be made safer to drink by such actions as filtering, boiling, and use of chemical decontaminants. (a) Do you expect the cleanliness of drinking water to be affected by income? Do you expect it to be a normal or an inferior good? Why? (b) Do you expect the cleanliness of drinking water to be affected by the cost of decontamination? For instance, do you think the number of people with access to cleaner water is affected by the availability and price of fuel to boil water? (c) Does cleaner drinking water have substitutes or complements? Provide one example of each, or explain why you don't think an example exists. (d) What factors, if any, might affect people's preferences for cleaner drinking water? Provide one example of something that might change people's preferences, or explain why you don't think an example exists.Explanation / Answer
5)-The demand curves detones or tells us how much money the devotes to a special good .
The demand curves problem is that there are typically no market so we have no servey on how much of an environmental goods are devour at differnt prices.
a)-Yes i expect the cleanliness of drinking water to be affected by income.
Reasons-
1- There are so many poor countaries in world so the have not so money to clean the water or provies the clean water .
2-Countaries have not advanced technology to clean the water.
3-There are so many countaries whose ruled by dictators so their dectetors have money but peoples live in poor conditions.
4-There are some countaries have not some much water in the ground so that's a big problem.
so some countaries have fixed economy so if we invest the money on cleaning on water so there ecomony is distrubed.
so i think drinking water affected by income.
Interior good - if we have a product is $5 and consumer income is low so the demand of product is high but if consumer income is high then our product demand is decreases.
so it comes in interior goods because consumer income is high but drinking water demands low in this time. but in future there are some chances drinking water demands high.
b)-Yes cleanliness of drinking water to be affacted by the cost of decontamination.
Reason-
The decontamination is process to clean something like water, gas or other things. so in decontamination, we removes contaminations like chemicals,hazardous.
and it consumes so much cost so it has a costly process.It is costly so many countary do not affored it.
Yes 70 % water in earth but only 3% water available for drinking and only 1% freshwater is easily availble.
So water availablity is a problem for people.
Yes fuel prices increases day by day because of no so much availabilty of fuel in world.we used lots of million fuel in one day
so fuel prices will increase.
c)-Drinking water is compliment because drinking water demand is increases so the demand for its complemant will decreases because consumers do not want to use complement alone.
example-let price of drinking water rises so tea prices also rises so that so people do not consuming them.
Substitude means is replace one good to other good but we do not replace water to other things.
example- if we replace water to like energy drinks but some part of water is there and it is made by chamicals and harmfull.
so water can not replace anything.
d)-The factor is people do not know that the water had drinked have dirty or not good it's a lack of knowleadge of people.
and government do not advitise on cleanliness of drinking water so all people of the world have not so much knowledge of this thing.
1)- the machines of cleanliness of drinking water has very costly so people don't buy it.
2)- Machines are big so it is not for house.
If we do advitise or give the knowledge of people so it's work. We had to go house to house and give such data to them or talk then give such knowledge them.
example- The articles on cleanliness of drinking water on newspaper or show news on tv. That is the best ides for affect people preferenes for cleanliness drinking water.
and we do a seminar on cleanliness of drinking water.
Water is neccessary for us so please do not waste it and save water save life.
THANK YOU
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