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:

Succession Management

The method of finding and grooming new leaders to take over when existing leaders depart, retire, or die, thereby maintaining the continuous operation of the organization.

Effectiveness Perceptions

Individuals' or groups' beliefs about the degree to which a process, action, or policy achieves its intended outcome.

Key Characteristics

The most important attributes or qualities that define an object, person, or organization.

Replacement Planning

A process in human resources management aimed at identifying key roles within an organization and developing plans to replace those roles when the current incumbents leave.