Scenario 18.1: It Is the Factory's Choice Whether to Install a Filter

question 32

Multiple Choice

Scenario 18.1:
It is the factory's choice whether to install a filter. It is the choice of the nearby fishermen whether to install a treatment plant. Dollar figures show profit. The factory and the fishermen can negotiate costlessly, and no one else is affected by the result.
Factory Fishermen
A: No filter or treatment plant $10,000 $2,000
B: Filter; no treatment plant $6,000 $10,000
C: No filter; treatment plant $10,000 $4,000
D: Filter; treatment plant $6,000 $6,000
-Refer to Scenario 18.1. If the fishermen are given the right to clean water,

• A) the outcome will be more efficient than if the factory is given the right to use the water as it sees fit.
• B) the outcome will be less efficient than if the factory is given the right to use the water as it sees fit.
• C) the efficient outcome will occur no matter who is given which property right, and the individual gains will be the same in each case.
• D) the factory will be forced to shut down.
• E) the efficient outcome will occur no matter who is given which property right, but how that maximum gain is split will be determined during bargaining.

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Definitions:

Mental Health

Refers to the cognitive, behavioral, and emotional wellbeing of an individual; it is about how people think, feel, and behave.

Lab Testing

The process of performing various tests in a controlled environment, usually a laboratory, to analyze substances, diagnose conditions, or conduct research.

DTaP

A vaccine that protects against diphtheria, tetanus, and pertussis (whooping cough), recommended for children for immunity against these infectious diseases.

MMR

A combined vaccine used to prevent measles, mumps, and rubella, diseases caused by viruses.