One Drawback of Using the Yardstick Approach to Structure Business

question 79

Multiple Choice

One drawback of using the yardstick approach to structure business reports is that

• A) you must discuss all the alternatives, even if many of them turn out to be irrelevant and/or unproductive.
• B) this approach is generally considered old-fashioned.
• C) it forces you to ignore the fact that the problem may have multiple causes.
• D) it is impractical in most business settings.
• E) it often oversimplifies the topic.

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Definitions:

Pigouvian Tax

A tax imposed on activities that generate negative externalities, intended to correct an undesirable or inefficient market outcome by being equal in value to the externality.

Positive External Benefits

benefits that result from a product or service's use that affect someone other than the direct buyer or seller, often leading to social gains.

Optimal Amount

The quantity of a good or service that achieves the best possible balance between costs and benefits.

Pigouvian Tax

A tax levied on activities that generate negative externalities, intended to correct the market outcome by internalizing the external costs.