There Are 10,000 Families in a Neighborhood That Are Affected

question 105

Multiple Choice

There are 10,000 families in a neighborhood that are affected by noise pollution from a local factory. The noise could be reduced if the company spent $5,000 on technological improvements. The company agrees to make these improvements if the affected families contribute the $5,000. Since there are so many families, they fail to come to a resolution to which they will all agree. This outcome is an example of the

• A) free-rider problem.
• B) drop-in-the-bucket problem.
• C) Coase theorem.
• D) collective action problem (that arises when there are too many parties involved).

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Definitions:

Assembly Of Goods

The process of combining components or parts to manufacture a finished product.

Developed Nations

Countries with advanced industrial bases, high standards of living, and well-developed infrastructures.

Job Displacement

Occurs when employees lose their jobs due to factors such as automation, economic downturns, or structural changes in the industry.

Global Economic Shift

Major changes in the global economy that affect international trade, finance, production, and employment patterns.