Microeconomics Water Essay

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Microeconomics Resource Economics Water One of the most unique and abused commodities in the world today is water. In most free markets, prices reflect the value of the commodity. However with water that was never the case until about the last 20 – 30 years or so. Until recently water has always been considered a free good. Water is one of the most vital natural resources for all life on Earth , yet people have always taken it for granted. Depending on the country and region, the price of water will fluctuate due to how much refinery is required, distance the water is transported and even the elevation to which the water has to be pumped. Within the last two decades we have seen a sharp increase in the price of water all over the world. In 1980 the average U.S. water bill was the minimum charge of 7.00 per month in most areas. Today the average U.S. water bill is $60.00 per month. Interestingly, supply and demand does not always dictate the price of water. The comparison below shows that due to utility pricing structures, certain urban areas, such as Boston, which has high rainfall and low consumption, will pay higher water rates than in cities like Phoenix. Where rainfall is low and consumption is high. Water is used in everything we do. This is most probably why it has been taken for granted for so long. Commercial water use includes fresh water for motels, hotels, restaurants, office buildings, other commercial facilities, and civilian and military institutions. Domestic water use is probably the most important daily use of water for most people. Domestic use includes water that is used in the home every day, including water for normal household purposes, such as drinking, food preparation, bathing, washing clothes and dishes, flushing toilets, and watering lawns and gardens. Industrial water use is a valuable resource to the nation's

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