The article suggests that it would be better to use the water for energy. The demand for electricity will be rising with many western states facing power cuts. Other industries (ex. aluminum producers), have cut production so they sell electrical power, because it is more valuable. The point that we are at on the PPC for water needs to be changed. While we are still being …show more content…
The Production Possibilities Curve pictured above is an example of when two items fall under The Law of Constant Relative Costs. We get a straight line instead of a curve because the water is used for either potatoes or electricity. The resources used to create them are the same. I feel like the solution to this problem is very simple yet hard to put into action. The farmers should get a certain amount of water at a discounted price to make the desired amount of potatoes. If the farmers want to produce more, then they should pay regular market price for the water. The rest of the water should be used to create energy. This is better for both, the environment and economy. Also, the farmers should get their licenses taken away after 5 years of no usage, but at the same time getting the license back shouldn’t be made