Suppose There Are Two Factories on a River, and Both

question 76

Multiple Choice

Suppose there are two factories on a river, and both need clean water for their production processes. The upstream factory takes in clean water and dumps dirty water back into the river. The downstream firm must clean up the water it gets from the river before using it. In this situation

• A) the private costs of the downstream factory are more than the private costs of the upstream factory, but for both factories private costs and social costs are the same.
• B) the social costs are greater than the private costs for the upstream firm, while the social costs are less than the private costs for the downstream firm.
• C) the upstream factory's private costs are less than its social costs, and its external costs are borne by the downstream factory.
• D) the internal costs of the upstream factory are externalized by the downstream factory, which then passes them on to its customers.

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Definitions:

Outcomes

The results or effects of an action, situation, or event, often used to evaluate the effectiveness or impact of an intervention.

William James

An American philosopher and psychologist, often referred to as the "Father of American psychology," known for his contributions to pragmatism and functionalism.

The "Me"

The part of an individual's self-concept that is based on self-reflection and how others perceive them.

Ego Depletion

A state of diminished capacity to exercise self-control or focus, following a period of exertion in using one's self-control.