A Large Factory Pours Its Toxic Wastewater into a Nearby

question 201

Multiple Choice

A large factory pours its toxic wastewater into a nearby river, and as a result, the residents of a downstream community experience high rates of illness and birth defects.The economic problem illustrated by this example is

• A)marginal thinking.
• B)comparative advantage.
• C)repealing the laws of supply and demand.
• D)externalities.
• E)productivity growth.

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Definitions:

Resource Allocation

The process of assigning available resources in the most efficient manner to meet the objectives of an organization or economy.

Innovation Encouragement

Initiatives or policies designed to foster new ideas, products, or methods, particularly in technology, medicine, or other fields.

Economic Profit

The difference between a firm's total revenues and the sum of its explicit and implicit costs, indicating its overall financial health beyond just accounting profits.

Ideal Economic Efficiency

Achieving the optimum level of output and resource allocation where no individual or preference can be made better off without making someone else worse off.