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ECON 3041 Managerial Economics and Geopolitical Forces

Questions:

1.Discuss the American pricing paradox.Use the concepts of scarcity and value to explain why Americans would want to pay higher for a renewable resource (water) and pay lower for a non-renewable resource (gas).
2.What factors account for the consumers’ willingness to pay a higher price for bottled water?
3.What is meant by paying for a lifestyle?Contrast this with poor countries in Africa where the lifestyle is not having sufficient water for everyday needs.Some economists claim that water shortage would trigger the next World War.Comment on this.
4.What factors account for the change of water from a “free” good to a very scarce commodity which commands a very high price?
5.What could account for the increase of price in gasoline in recent years?Do you think high prices of gasoline will continue in the future?Please explain your answer.
6.In your opinion, will gasoline remain a political commodity?Do you expect the balance of economic power to change from those “who do not have” oil to those “who have” oil?Please explain your answer.
7.What is the difference between water as a “lifestyle” good and gasoline as a “political” commodity?
8.How much of the pricing paradox is explained by economics, lifestyle and politics?

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