If Some Activity Creates External Benefits as Well as Private

question 142

Multiple Choice

If some activity creates external benefits as well as private benefits, then economic theory suggests that the activity ought to be:

• A) Taxed
• B) Prohibited
• C) Subsidized
• D) Left alone

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Definitions:

Divisionalized Structure

An organizational form where operations are segregated based on products, markets, or geography, allowing for a degree of autonomy and specialization.

Formal Hierarchy

A structured organization where individuals have specific positions, responsibilities, and levels of authority delineated in a clear manner.

Coordinating Mechanism

Methods or systems used within organizations to align activities, tasks, and personnel to achieve common objectives seamlessly and efficiently.

Coordinating Mechanism

Structures, processes, or systems used to align activities, efforts, and resources within an organization or among different entities towards achieving common goals.