1. Economics of Public Issues
Comments on Chs. 6, 10 and 15

2. Ch. 6 Is Water Different? Water is a renewable resource
Water depletion/shortage is a worldwide problem (Mono Lake, SW, GA)
Water is an “economic good”
Water is often “underpriced”
Economists argue for the “accurate” pricing of water

3. Is Water Different? Price elasticity of demand for water
Why is price elasticity of water greater in the long run?
Economists support the establishment of water markets (and the trading of water rights)
Discussion questions on p. 46

4. Is Water Different?
Concepts: scarcity, economic good, renewable resource, market price, government regulation
QCC’s: 1, 2,7, 11 and 22

5. Water Issues in Georgia
Alabama, Florida, and Georgia need to agree on how to divide up water in region
Atlanta MSA growth had lead to a significant increase in water demand
Georgia is current developing a state water use plan

6. Water Challenges
Who is most deserving of water, farmers or suburbanites?
Is water a private resource or a public resource owned by the state?
Should water be bought and sold like any other good?
Should we transfer water between regions?

7. Ch. 10 Rent Controls
Basis for support of rent controls on apartments: the need for low cost housing, the need to regulate landlords, etc.
Problems associated with rent controls include housing shortages, poor maintenance, discrimination, and negative impact on worker mobility
Many rent control laws have been modified to deal with the above problems

8. Rent Controls
Why do economists generally oppose rent controls (or price ceilings in general)?
Reasons include a strong belief in the efficiency of markets, incentives to maintain property, incentive to add units, less bureaucracy, etc.
Discussion questions on p

9. Rent Controls
Concepts: scarcity, supply and demand, market price, economic incentives, government regulation
QCC’s: 1,2,8,11,22

10. Ch. 15 Cartels
Defined as “an agreement among firms in a market about quantities to produce or prices to charge”
Why do this? (search for “excess profits”)
Requirements for success: share, substitutes, stability, solidarity

11. Cartels
Examples of cartels: early U.S. rail industry, shipping, OPEC, DeBeers
Price Fixing (railroads, shipping lines) vs. quotas (OPEC, Debeers)
Discussion questions on p. 105.

12. Cartels
Concepts: price determination, supply and demand, market structure
QCC’s: 11,16