If a Company Dumps Pollution in the Water and Fishermen

question 17

Multiple Choice

If a company dumps pollution in the water and fishermen are hurt and if transactions costs are prohibitively high and efficiency is the most important criteria,

• A)the company should be made liable for the damage.
• B)liability should be placed on the group that has the least cost of solving the problem.
• C)the company should be allowed to pollute because a river is not private property.
• D)the company should be taxed enough so the government can keep the river clean.

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Definitions:

Private Sector

The part of the economy that is run by individuals and companies for profit and is not under direct state control.

Public Sector

The part of the economy composed of government services and enterprises, including infrastructure, education, and healthcare services.

Labor Productivity

refers to the amount of goods and services produced by one hour of labor.

Developing Nations

Countries that are in the process of industrialization and have lower levels of material well-being compared to developed economies.