A Copper Ore Refiner Pollutes the Water Upstream from a Brewery

question 303

Multiple Choice

A copper ore refiner pollutes the water upstream from a brewery. These are the only two parties involved. The transactions costs of reaching an agreement between the refinery and the brewery are low. The amount of water pollution will be at the efficient level

• A) only when the property right to the stream is assigned to the ore refinery.
• B) only when the property right to the stream is assigned to the brewery.
• C) when the property right to the stream is assigned to either the refinery or to the brewery.
• D) when no one has clear property rights.

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Definitions:

Consignment

Goods from a producer to a commission merchant for sale at the best possible price.

Total Gross Pay

The total amount earned by an employee before any deductions or taxes are applied.

Commission

Commission is a fee paid to an agent or employee for transacting a piece of business or performing a service, often a percentage of the sale.

Monthly Salary

A fixed amount of money or compensation paid to an employee by an employer for services rendered during a month.