According to the Coase theorem, private markets will solve externality problems and allocate resources efficiently as long as
a. the externalities that are present are positive, not negative.
b. government assigns property rights to the harmed party.
c. private parties can bargain with sufficiently low transaction costs.
d. businesses determine an appropriate level of production.
c
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Suppose that the Japanese yen appreciates significantly at some point, thus making Japanese imports more expensive. Japanese exporters may lower their profit margins to reduce the effect of the yen appreciation on U.S
importers, producing a phenomenon known as A) the J-curve. B) the absorption effect. C) pricing to market. D) international reserves compliance.
In the United States, the wage floor legislated by government below which it is generally illegal to pay workers is known as
A) the minimum wage. B) the wage ceiling. C) the employment gap. D) the going wage.
The rate of return in loanable funds describes the:
A. expected profit that a project will generate per dollar invested. B. cost of borrowing. C. interest rate on loans. D. the profit firms should make when investing borrowed funds.
If the interest rate is below the equilibrium, which of the following occurs in this market?
a. excess supply b. excess quantity supplied c. excess demand d. excess quantity demanded