Multiple Choice
Use the information below to answer the following questions.
Fact 5.3.1
Only 1 percent of the world supply of water is fit for human consumption. Some places have more water than they can use; some could use much more than they have. The 1 percent available would be sufficient if only it were in the right place.
-Refer to Fact 5.3.1. A free world market in water ________ achieve an efficient use of the world's water resources because ________.
A) would not; it is not profitable for the water-rich countries to ship water to the water-poor countries
B) would; people in water-rich countries want to help people in water-poor countries
C) would not; water-poor countries are not willing to pay market price for water
D) would; the invisible hand leads the equilibrium price to equal the quantity at which marginal social benefit equals marginal social cost
E) would not; water is vital for life so it must be allocated by a method other than market price
Correct Answer:

Verified
Correct Answer:
Verified
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