4. Water is an essential resource. For that reason moral considerations exert considerable pressure to assure that everyone has access to at least enough water to survive. Yet it appears that equity and efficiency considerations may conflict. Providing water at zero cost is unlikely to support efficient use

(marginal cost is too low), while charging everyone the market price (especially as scarcity sets in) may result in some poor households not being able to afford the water they need. Discuss how block rate pricing attempts to provide some resolution to this dilemma. How would it work?