Cotton's Sudden Boom Summary

In the article “Cotton’s sudden boom raises specter of a bust,” it talks about how the cotton industry has surged after a downfall. Now, farmers are replacing their vineyards and vegetable fields with cotton fields because the cost of cotton is so high right now. Joblessness was a problem for some cities, but now, they are able to grow cotton to get their economy back on track. This is an example of incentives matter because when the price of the cotton went up, a lot of new suppliers hit the market for cotton. This makes a shift in the supply of cotton because a lot more businesses are joining in to grow cotton. On the other hand, since prices are so high, consumers cut back to cheaper materials as well as some business switch from cotton to a less expensive fabric. In the article “Cotton Clothing Price Tags to Rise,” it speaks about how prices for cotton are continuing to go up, so prices for clothing are also going up. As a result, many businesses are trying to cut back on the amount of cotton they use in their clothes. Much of the supply of cotton was wiped out due to floods which causes the price to go up as well. This is an example
There are not really systems in place that would help to conserve water in the West. The systems currently do not charge a lot for water so there is no incentive to save water. The cost of water out West is far less than what it is in the East. This is an example of incentives matter because since the prices are so low for consuming water, people will continue to live their lives the way that they are already living. If the prices were to go up for water, it would cause for less demand because people would not want to pay a lot for water and would conserve. Since prices are not allowed to rise, there are no incentives to save