Figure 11-6 Suppose There Are Several Paper Mills Producing

question 71

Multiple Choice

Figure 11-6 Suppose there are several paper mills producing paper for a market. These mills, located upstream from a fishing village, discharge a large amount of wastewater into the river. The waste material affects the number of fish in the river, and the use of the river for recreation and as a public water supply source. Figure 11-6 shows the paper market. Use this Figure to answer the following question(s) .
-Refer to Figure 11-6.What does S₂ represent?

• A) The market supply curve that reflects social cost.
• B) The market supply curve that reflect private cost.
• C) The market supply curve that reflects external cost.
• D) The market supply curve that reflects social benefit.

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Definitions:

MRTS

The Marginal Rate of Technical Substitution; the rate at which one input can be substituted for another input in the production process, while keeping the output level constant.

Rawlsian View

A philosophical approach to justice that emphasizes fairness and equality, proposing principles to structure society in a way that benefits the least advantaged members.

Equity

The ownership interest in a corporation in the form of common stock or preferred stock, representing a share of the company's assets and profits.

Utilitarian View

A perspective in ethics and philosophy that emphasizes the greatest happiness or utility for the greatest number as the primary consideration in decision making.