What is the Coase Theorem? What are transaction costs?
The Coase Theorem asserts that if the benefits are greater than the costs for some course of action, there must be potential transactions that can make some people better off without making anyone worse off. For this to result property rights must be well-defined and transaction costs must be low. Transaction costs are the costs of negotiating and executing an exchange, excluding the cost of the good or service bought.
You might also like to view...
If official reserves increase, then we know that the
A) capital and financial account is positive. B) official settlements account balance is negative. C) capital and financial account and the current account must sum to zero. D) capital and financial account is negative. E) official settlements account balance is positive.
The currency deposit ratio, c, is 0.10. The reserve requirement, rr, is 0.08. The excess reserve ratio, e, is 0.05. What is the size of the money multiplier?
A) 4.70 B) 4.78 C) 4.75 D) 4.00
The compensation variation and equivalent variation will be closer to each other when
A) the income elasticity is greater. B) the budget share is greater. C) the price change is smaller. D) the income elasticity is smaller.
One of the peculiarities of the U.S. market for health care is:
A. Third-party payments by insurance companies B. Government-provided health insurance C. Government tax credits and vouchers for consumers to pay for health care D. Fee-for-service payments for all physician visits