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

question 53

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. Which of the following is TRUE?

• A) The factory will never agree to B, because that would leave them with much less profit than the fishermen.
• B) C will never occur because that would leave the fishermen with much less profit than the factory.
• C) If the factory refused to install a filter, the fishermen would refuse to install a treatment plant.
• D) The factory must install a filter, because they contaminate the water.
• E) The profits above indicate profit before any agreement is made, and profit varies enough to make a mutually acceptable agreement possible.

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Definitions:

Social Inventions

Innovations in the social realm that change or influence the way societies operate, interact, or govern themselves.

Physical Assets

Tangible resources or possessions that have value and are owned by an individual or organization, such as buildings, machinery, or land.

Implements of Technology

The tools and devices developed from scientific knowledge used for practical purposes, especially in industry.

Differentiates Humans

Characteristics or qualities that distinguish humans from other species, including cognitive abilities, emotional complexity, and social behavior.