California voters and legislators frequently debate about the true cost of water in the course of trying to establish state policy to govern the use of water. The issue is confusing because
A) all water is ultimately a free gift of nature.
B) the cost of water is infinite.
C) water in itself, considered simply as a chemical compound, cannot be assigned any specific cost.
D) we cannot settle a question that is entirely a matter of opinion.
Question 2
A geologist tells the ACME Mining Company she's certain there is a gold vein one thousand feet below the surface of its property, but ACME still decides not to mine for that gold. How would an economist explain their decision?
A) The owners of ACME aren't as greedy as other mining operations.
B) The owners of ACME probably distrust the geological reports.
C) The owners of ACME feel the additional costs of mining for gold outweigh the additional benefits.
D) The owners of ACME are ignorant of the basic principles of economics.
