The article, “You say Potato, I say Electricity,” focuses mainly on water, potatoes, and the energy crisis. A lot of water is being used for potatoes. Due to improvements in technology, Idaho farmers 20 billion pounds of potatoes, which is, “up from 12 billion pounds 20 years ago.” This causes a partial shift in the Production Possibilities Curve (PPC). There is a surplus of potatoes because the market supply is a lot more than the market demand. When using a lot of the water on potatoes, hydroelectric power is the opportunity cost. There is a choice between using the water for potatoes and using it to create electricity. The article suggests that it would be better to use the water for energy. The demand for electricity will be rising with many western states facing power cuts. Other industries (ex. aluminum producers), have cut production so they sell electrical power, because it is more valuable. The point that we are at on the PPC for water needs to be changed. While we are still being “efficient” we are creating more of a product that is not wanted. It is also evident that the author of this article shares this opinion as well because of the negative adjectives he uses when referring to water being used to create potatoes.
Water is being used at point A now, it should be
moved to point B because there is a greater need to produce electricity right now as opposed to potatoes (which we have an abundance of).
The Production Possibilities Curve pictured above is an example of when two items fall under The Law of Constant Relative Costs. We get a straight line instead of a curve because the water is used for either potatoes or electricity. The resources used to create them are the same.
I feel like the solution to this problem is very simple yet hard to put into action. The farmers should get a certain amount of water at a discounted price to make the desired amount of potatoes. If the farmers want to produce more, then they should pay regular...