Because of the effects of El Nino-warming of the Pacific Ocean off the coast of South America-the winter of 1991-92 in the Pacific Northwest was extremely mild, and the mountain snow pack from which cities such as Seattle get their water was virtually gone by the summer of 1992. In response to this, the City of Seattle announced emergency restrictions in water usage to avoid a water shortage the following summer. Consumers were asked to voluntarily restrict water use, and were forbidden to water lawns, wash cars and use sprinkler systems for shrubs.

a. Is a water shortage a necessary consequence of reduced water supply? In the technical sense of the word, what caused the shortage? Explain your terms and definitions precisely.

b. Suppose water was supplied to this area by many private water suppliers.. What effect would El Nino have had on the market for water, and, in par- ticular, would the above government actions have been required?

c. Using a suitable supply and demand diagram, explain the effect of El Nino on the market for garden plants in 1992, under either of the above scenarios of water supply.