According to the Coase theorem, the private market will need government intervention in order to reach an efficient outcome
a. True
b. False
Indicate whether the statement is true or false
False
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Which of the following is true of equilibrium?
A) Equilibrium refers to a situation where an economic agent can be made better off without making anyone else worse off. B) Equilibrium refers to a situation where the government allocates resources among economic agents. C) Equilibrium refers to a situation where all economic agents are making sub-optimal choices and have an incentive to change behavior. D) Equilibrium refers to a situation where all economic agents simultaneously optimize after considering each other's actions.
Why does a profit-maximizing firm hire labor up to the point where the value of marginal product equals the wage rate?
What will be an ideal response?
In general, the larger the price elasticity:
a. the smaller the responsiveness of price to changes in quantity. b. the smaller the responsiveness of quantity to changes in price. c. the larger the responsiveness of price to changes in quantity. d. the larger the responsiveness of quantity to changes in price.
Define allocative efficiency. Explain the significance of this concept in economics?
What will be an ideal response?