Along with the development of the earth is a series of social events need to be addressed, such as population growth, food shortages and water shortages in many parts of the world. Specifically, people in Australia are facing with the threat of water shortage in the future. This problem has created an economic problem and urged the Australian government to find the solutions for this problem. This essay will explain the economic problem and answer the question how do markets attempt to solve the problem of water scarcity in Australia, focusing on the economic problem, water scarcity in Australia, the role of markets and water market in Australia.
The economic problem can be known as the competition between unlimited wants and scarce resources. Unlimited wants are goods and services that people want to have are unlimited. But, scarce resources, things to make products, are limited. Because people’s want cannot be satisfied while resources needed to satisfy these wants is scarce, limited. Bized (n.d) points out that because our money is limited, we cannot get everything we ‘want’. Moreover, the scarcity of water is an economic problem. Water is a very significant part in our life, because everyone and everything in this world cannot live without water. However, population growth, intensive agricultural development, urbanization, industrial growth and environment requirements are all increasing demand for water. Not only that, the percentage of fresh water in the world is 3%, while 97% is salty water and it also cannot be reused or renewable. Water is the main source of living things, so the earth will become dry as a planet in space if it has no water. So that this economic problem needs to be solve.
In addition, the increase in demand of water use and reduce water availability is a problem in Australia. Between 1983 and 1997, 9400 GL water use is increasing every year (NLWRA 2001 cited in Australian Government). According to the Wentworth Group of...
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