New England Company plans to build a power plant on the Charles River. By using river water to cool its plant, the river's water temperature will rise enough that trout will no longer survive, much to the dismay of local fishers. The loss of value to the fishers is estimated as $100,000. The transactions costs of a side payment from either side to the other are prohibitive of any agreement. Therefore, if the property right to the water is worth
a. more than $100,000 to New England Company, who gets the right would not matter.
b. more than $100,000 to New England Company, efficiency dictates giving the right to the fishers.
c. more that $100,000 to New England Company, efficiency dictates giving the right to New England Company.
d. less than $100,000 to New England Company, efficiency dictates giving the right to New England Company.
c. more that $100,000 to New England Company, efficiency dictates giving the right to New England Company.
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Rivalry among firms and individuals for sales to consumers
a. is the natural regulator that makes a market system work. b. is known as competition. c. regulates the allocation of resources in a market system. d. All of these.
On the 45-degree line diagram, the 45-degree line shows points where real aggregate expenditure equals
A) nominal GDP. B) unplanned investment. C) real GDP. D) planned investment.
Countries that compete by offering foreign firms a reduced set of environmental compliance requirements are known as
A) transboundary members. B) pollution havens. C) pollutants. D) pollution exporters. E) pollution guards.
Extrapolating past values of a variable to the present is the practice of __________ expectations, which is fairly common among __________ economists
A) adaptive; New Classical B) adaptive; Keynesian C) rational; New Classical D) rational; Keynesian