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Refer to the Following Paragraph to Answer the Questions Below

question 28

Multiple Choice

Refer to the following paragraph to answer the questions below.
After graduating from university, Samantha got a job with the county government. One year into her new job, she learned that Big Corporation planned to build a huge new factory on farmland outside a quiet, small town of Smallsville that had 2,000 residents. Big Corporation flew in a high-powered public relations team of five people who showed a slick video, threw out a few statistics, and promised that many new jobs and income would come to the county and town. Two of the public relations people said they were Factory Site Experts. They said that in the three other locations where Big Corporation had built factories in the past two years, the local people were very happy. They said the same would occur in Smallsville and further study was unnecessary. Just before the County Board was about to vote for approval, Samantha asked some questions. How would the new factory with 1,000 employees affect the way of life in Smallsville? Would the new factory create traffic congestion, noise, and air or water pollution? Would the town need to upgrade its police, fire, or ambulance services? Would it raise housing prices? What percent of the jobs would go to local people, and would the jobs be well-paying and stable? Would there be three shifts with some shifts ending late at night or early in the morning? How would the local schools and sewage treatment services be affected? Would the new factory's location adjacent to the area's only park limit the use of the park and its playground and bicycle trail by local children?
-Based on her questions, Samantha urged the County Board to delay a decision and first conduct a

Identify the characteristics and challenges of managing common resources.

Understand the concept of marginal social benefit (MSB) and how it is calculated for different members in a society.

Recognize the characteristics and implications of nonexcludable goods, including the free-rider problem.

Determine the socially optimal level of provision for public goods and common resources.

Definitions:

St. Louis World's Fair

Also known as the Louisiana Purchase Exposition, it was an international exhibition held in 1904 in St. Louis, Missouri, to celebrate the centennial of the 1803 Louisiana Purchase.

United Fruit Company

A U.S.-based corporation that was a major producer and marketer of fruit and other foods, primarily bananas, and had significant influence in Latin America.

Indochina

A region in Southeast Asia, comprising the countries of Vietnam, Laos, and Cambodia, notable for its colonial history under French rule and subsequent conflicts.

Palestine

Palestine traditionally refers to a region in the Eastern Mediterranean, historically significant and now comprising parts of modern Israel and the Palestinian territories.