Suppose That a Firm Is Located Along a River

question 110

Multiple Choice

Suppose that a firm is located along a river.The firm uses water from the river to cool its machinery and returns the water to the river several degrees warmer,which has led to a decline in the fish population downstream of the firm.
The damage to the downstream fish is a(n) :

• A)relevant cost of production.
• B)relevant cost of production only if the firm is charged a fine for the damage done.
• C)relevant cost of production only if there are commercial fishing activities downstream.
• D)implicit cost of production which the firm will take into account in determining profit maximizing output.

---

Definitions:

Biopsychosocial Model

An interdisciplinary model that looks at the interconnection between biology, psychology, and socio-environmental factors when assessing human development and health.

Biochemical

Pertaining to the chemical substances and processes that occur within living organisms.

Biomedical

Relating to the use of natural sciences, particularly biology and physiology, in the practice of clinical medicine.

Psychosomatic Illnesses

Disorders that involve both mind and body where psychological stress can contribute to physical illness.