Answer: B. under use; it is a scarce resource.
Explanation:
Early settlers in the town of Dry Gulch drilled wells to pump as much water as they wanted from the single aquifer beneath the town. (An aquifer is an underground body of water.) As more people settled in Dry Gulch, the aquifer level fell and new wells had to be drilled deeper at higher cost.Residents of Dry Gulch have a private incentive to under use water because it is a scarce resource.
The troposphere is hotter near the Earth's surface because heat from the Earth warms this air. As the altitude increases the number of air molecules decreases, the average of their kinetic energy decreases.
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I believe the first answer is #4 and the second is #1. Please correct me if I am wrong.