Pistachios and Scarcity
1) Identify and explain the main problem being discussed in the podcast.
2) Using relevant examples, identify, define, and explain ALL the four factors of production mentioned in this story
3) Using examples, define and explain the following terminology as used in the story: • Scarcity — • Externalities — • Tragedy of the commons (look it up) • Cap and Trade (look it up using a search engine)
4) Why are farmer’s like Mark Watte choosing to grow pistachios instead of other crops? Hint: think of Marginal Benefits versus Marginal Costs and the role current incentives are playing in in what crops farmers choose to grow.
5) What are the two rationing devises economists Betsy Stephenson and Justin Wolters propose to limit water use by farmers?
6) What are the three end game scenarios that will emerge if farmers cannot figure out a way decrease water use in California?
7) In what way would government Intervention in regulating water usage lead to unintended consequences? B) George Hartman, proposed a voluntary decrease in water consumption by 25%, do you think this is a better solution than using government regulations and other rationing devises? Why or why not?