The Coase Theorem states that:
A. if bargaining is difficult, then regardless of how property rights are assigned, voluntary agreements between parties will remedy the market failures associated with externalities and restore economic efficiency.
B. if bargaining is frictionless, then the initial assignment of property rights determines the market failures associated by externalities and voluntary agreements between private parties are useless.
C. if bargaining is frictionless, then regardless of how property rights are assigned, voluntary agreements between private parties will remedy the market failures associated with externalities and restore economic efficiency.
D. if bargaining is frictionless, market failures must be remedied by government intervention.
C. if bargaining is frictionless, then regardless of how property rights are assigned, voluntary agreements between private parties will remedy the market failures associated with externalities and restore economic efficiency.
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Proponents of a balanced budget amendment to the Constitution argue that it will finally exert discipline on the federal government and so prevent large peacetime deficits. What do the critics argue?
What will be an ideal response?
Which of the following compose the M2 money supply?
a. Currency only. b. Currency, checkable deposits, and traveler's checks. c. M1 plus large denomination time deposits and Eurodollar deposits. d. M1 plus savings deposits and small-denomination time deposits.
If the production of a particular good involves significant external benefits, to force the externality to be internalized the government might:
a. impose a tax on production of the good in order to increase production. b. impose a tax on production of the good in order to decrease production. c. offer a subsidy for production of the good in order to increase production. d. offer a subsidy for production of the good in order to decrease production.
If you were a Keynesian economist, you would
a. believe that saving is always detrimental to our economic health b. believe that increased saving always leads to lower national income0 c. believe that increased investment is undesirable d. see economic trouble ahead if saving increases unattended by a complementary increase in intended investment e. actively try to achieve the paradox of thrift for our national economy