According to the Coase theorem, externality problems may be solved if the parties involved can negotiate. Which of the following is also needed?
a. clearly defined bargaining costs
b. enforceable bargaining costs
c. clearly defined, enforceable property rights and low bargaining costs
d. a property right that cannot be bought or sold
e. government regulation
C
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Even though women may often constitute the majority of the rural-urban migrants in a country, they usually still remain employed in the informal sector. Why? What are the consequences of this?
What will be an ideal response?
You're deciding whether to install an $800 moonroof and a $400 security system in your car. Suppose the marginal benefit from the moonroof is $700 and the marginal benefit from the security system is $600. The economic decision rule dictates that you should:
A. purchase both options because the combined cost of both is less than the combined benefit. B. not purchase either because the benefits of each do not exceed the costs. C. purchase only the security system because its marginal benefit exceeds its marginal cost. D. purchase only the moonroof because that will provide you with the greatest marginal benefit.
Refer to the table. Suppose that the transactions demand for money is equal to 20 percent of the nominal GDP, the supply of money is $800 billion, and the asset demand for money is that shown in the table. If the nominal GDP is $2000 billion, the equilibrium interest rate is:
A. 4 percent
B. 5 percent
C. 6 percent
D. 7 percent
Assume that a tariff is imposed on an imported product. The difference between the domestic price and the world price is captured by:
A. The government B. Domestic consumers C. Domestic producers D. Foreign exporters