Some municipal water companies charge customers a flat fee each month, regardless of the amount of water they consume. Others meter water use and charge according to the quantity of water customers use. Compare the way the two systems affect the cost of water use at the margin.
-How might you test each of the following hypotheses? Suggest some problems that might arise in each test due to the ceteris paribus (all-other-things-unchanged) problem and the fallacy of false cause.
-Reducing the quantity of heroin available will increase total spending on heroin and increase the crime rate.
-Higher incomes make people happier.
-Higher incomes make people live longer.
-Many models in physics and in chemistry assume the existence of a perfect vacuum (that is, a space entirely empty of matter). Yet we know that a perfect vacuum  cannot exist. Are such models valid? Why are models based on assumptions that are essentially incorrect?

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1 The flat fee system would likely result in higher costs at the margin since customers would have no incentive to conserve water The metered system w... View the full answer