Question
In the Book " ECON 121" Santa Ana College Volume 2. Answer the question:
1> What is a coordination mechanism? Give an example.
a. It is a method of coordinating people's wants with other people's desires. All markets are a type of coordination mechanism. b. It is a method of helping people overcome their predictable irrationalities by mapping their preferences with all possible outcomes. Most coordination mechanisms are a matter of information. c. It is a method of deciding how to best coordinate worker abilities within a firm. Because a firm works by command and control, not markets, it must have a coordination mechanism. d. It is a method of coordinating people’s wants with other people's desires. Only markets with money and prices have a coordination mechanism. Markets without money and prices cannot match wants and desires.
Explanation / Answer
c. It is a method of deciding how to best coordinate worker abilities within a firm. Because a firm works by command and control, not markets, it must have a coordination mechanism