A Paint Firm Has Just Announced That It Will Be

question 42

Multiple Choice

A paint firm has just announced that it will be building a new plant in a small town that is currently experiencing a high level of unemployment. The new plant will create 500 new jobs in the area and will occupy unused land at the edge of town. The plant will also dump some harmful chemicals into the town's river. From an economic standpoint this dumping of chemicals

• A) is unimportant since the firm is reducing the unemployment in the region.
• B) creates a negative externality.
• C) is the production of a public good.
• D) creates a positive externality.

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Definitions:

Decay

The process of decline or deterioration, often used in reference to organic matter breaking down over time.

Processing

The series of actions or steps taken in order to achieve a particular end, often used in the context of information or data handling.

Continuum

A continuous sequence in which adjacent elements are not perceptibly different from each other, but the extremes are quite distinct.

Deep Processing

A method of learning in which information is analyzed in a meaningful way to aid recall and understanding.