Instructions

Answer questions 42-43 on the basis of information given in the following situation.

Three persons, A, B and C, lived on an island hill. A lived on the top of the island hill, B occupied the middle portion of the hill and C occupied the bottom of the hill. The top of the hill received good rainfall, the main source of water in the hill, though this portion of the hill had few trees. The middle of the hill however was lush with trees offering timber. The bottom of the hill had a good amount of stones and sand. A, B and C assessed their wealth in terms of ownership of timber, water, stones and sand available in the island hill only. During heavy rains, stones and sand from the top and middle portion of the hill rolled over to the bottom. When the rains stopped, both A and B claimed that some stones rolled down from their lands to the land occupied by C. They wanted the stones back. But C argued that rolling down of stones is a natural process.

Question 43

Six months later, the three realized that the solution offered by the wise man in the previous question wasn't working to the satisfaction of all, because it did not help them find the appropriate value of resources. Therefore, they reverted to status quo ante. After one year, all three of them wanted to construct a house each, on their respective property. Three types of resources-1.Timber, 2.water and 3.stone & sand- were required to build a house. While each had one resource in abundance none of them had all the three in sufficient quantity. They still could not come to an agreement on how to fairly value and use each other's resources to construct the house. They again approached the wise man for advice.

The wise man studied the situation carefully and proposed the following actions:
1. The governing body of the United Federation of Islands, of which the island hill is a part, should take ownership of all the three properties and construct houses for the three.
2. Each person should own one third of each of the resources.
3. The three persons should arrive at the value of resources by trading the resources among them.
Which of the following is the most appropriate in the best interests of A, B and C?

Solution

Option C is the best option as they have to optimize the resources based on the individual demand.

Option A all the three lose control over the problems. 

Option B again may not lead to sufficiency for construction of each of the house.


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