The Major Implication of the Coase Theorem Is That

question 86

Multiple Choice

The major implication of the Coase theorem is that

• A) government regulation is necessary to solve externalities.
• B) competitive pressures will eliminate externalities.
• C) resolving externalities is more costly than allowing them.
• D) individuals can solve many externalities if they can buy and sell the right to commit the externality.
• E) governmental solutions to externalities can only fail.

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Definitions:

Situational Leadership Model

A leadership theory proposing that effective leaders adjust their style according to the maturity and competency of their followers.

Task Behavior

The actions and activities an individual undertakes to achieve a specific objective.

Relationship Behavior

Actions and interactions that define the nature of relationships between individuals or groups.

Subordinates

Employees or team members who are ranked lower within an organization's hierarchy and report to a supervisor or manager.