Coase bargaining works best in a situation with a large number of affected parties and the transactions costs of bargaining are relatively low.
Answer the following statement true (T) or false (F)
False
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When an activity results in the creation of external benefits, markets will produce more than the socially optimal level of that activity
a. True b. False
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP rises, and current international transactions become more negative (or less positive). b. Real GDP and current international transactions remain the same. c. There is not enough information to determine what happens to these two macroeconomic variables. d. Real GDP falls, and current international transactions become more negative (or less positive). e. Real GDP rises, and current international transactions remain the same.
_______________________: A forced sale or a desperation purchase can cause unequal bargaining power between buyers and sellers. more commonly, personal relationships may cause a transaction price to be lower than true market value, as when a parent " sells" real estate to a son or daughter.
Fill in the blank(s) with the appropriate word(s).
The portion of consumer surplus that would have existed in a perfectly competitive market but is unobtainable by anyone in society under a monopoly is known as
A) monopoly profits. B) an unattainable surplus. C) a deadweight loss. D) an external cost.