Economics

AEB 2451: Economics of Resource Use Lecturer: Misti Sharp

Assignment 11: Utilities

Instructions: You may work in groups but you must turn in your own work! Indicate on the front page who you worked with (max 3 people). An electronic copy must be submitted online before midnight on Friday. Show all work so that partial credit may be given. This homework is worth 10 points total.

If you are in the Gainesville area, it is most likely the case that you are getting your water, electricity and gas from Gainesville Regional Utilities (GRU). This assignment is meant to familiarize you with utility pricing.

Based on the following pamphlet (https://www.gru.com/Portals/0/Understanding%20Your%20Bill%20-%20FY19.pdf) and other resources on the GRU website, answer the following questions:

1. What rate structure is GRU using for water, electricity and gas? Graph these “supply curves.” (5 points)

2. Do the pricing structures utilized by GRU reflect scarcity? Explain fully. (5 points)

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