It Is the Custom for Paper Mills Located Alongside the Layzee

question 30

Multiple Choice

It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. As a result, operators of hydroelectric power-generating plants downstream along the river
find that they must clean up the river's water before it flows through their equipment.
If the government intervenes and corrects the externality in the situation described, we would
Expect

• A) the supply of the output from the hydroelectric power plants to decrease.
• B) the supply of the output from the hydroelectric power plants to increase.
• C) the demand for the output from the hydroelectric power plants to decrease.
• D) the demand for the output from the hydroelectric power plants to increase.

---

Definitions:

High Distinctiveness

A feature or attribute that makes an individual or object stand out significantly from others in the same category or context.

Kelley's Covariation Model

A theory in psychology that describes the way people assign reasons to events by evaluating the event's consistency, distinctiveness, and the level of agreement among observers.

Internal Factor

Psychological or physiological conditions within an individual that influence their behaviors and decisions.

External Factor

Influences that impact an individual or organization but originate outside of their control.