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Read the Wall Street Journal Article "Losing the Lawn-With City's Help" and answer the questions below. 1. What is the effect on the demand for water of subsidies to replace grass at private Los Angeles residences with native California plants? What is the effect of the change in demand on L.A. water shortages? 2. Evaluate two options to reduce water shortages: increase the price of water; subsidize demand reduction. Why would the city of Los Angeles choose to subsidize demand reduction as opposed to increase water prices? 3. Does the L.A. water shortage indicate that markets poorly allocate resources? Submit your completed assignment by clicking the Assignment 2 link above.

Date Posted: 21/02/2017
Category: Economics
Due Date: 27/02/2017
Instruction
Read the Wall Street Journal Article "Losing the Lawn-With City's Help" and answer the questions below. 1. What is the effect on the demand for water of subsidies to replace grass at private Los Angeles residences with native California plants? What is the effect of the change in demand on L.A. water shortages? 2. Evaluate two options to reduce water shortages: increase the price of water; subsidize demand reduction. Why would the city of Los Angeles choose to subsidize demand reduction as opposed to increase water prices? 3. Does the L.A. water shortage indicate that markets poorly allocate resources? Submit your completed assignment by clicking the Assignment 2 link above.
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