What is an “externality”? Why might it create a problem for market allocation?
Answer to relevant QuestionsWhy is it widely accepted that the government is responsible for dealing with externalities? What is a public good? Is it necessary for government to provide a public good? Apply your answer to national defense. Apply your answer to a lighthouse. Could either be privatized?Are there private property rights within a firm? Who owns what? What is not owned? Can `trade and exchange occur within the firm without the existence of private property rights?If it is necessary for each employee to interact with all other employees, what organizational form makes most sense? If the employees work independently, not having to interact with each other, which organizational form ...It has been suggested that large, tall hierarchies will predominate in physical capital intensive industries, and these will typically have seniority-based promotion policies. By contrast, flat hierarchies will be seen in ...
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