What are some of the limitations of the Coase theorem in practice?
What will be an ideal response?
Some limitations of the theorem are as follows. First, the Coase theorem works only if the transactions costs are low, which is unlikely if there are many bargaining parties. Second, private solutions to the problem of externalities will occur only if all parties to the agreement have full information about the costs and benefits associated with the externality. In reality, this may not be likely or may be difficult to ensure. Third, all parties must be willing to accept a reasonable agreement. For example, if those suffering from the effects of pollution do not have information on the costs of reducing pollution it is unlikely that parties can reach an agreement. Unreasonable demands can hinder an agreement.
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Which of the following is NOT included in M1?
A) deposits in checking accounts B) deposits in checking accounts that pay interest C) savings accounts D) traveler's checks
Stephanie has decided to eat lunch between classes. She has ranked her choices, from highest to lowest as, (1 ) turkey sandwich, (2 ) tuna sandwich, (3 ) slice of cheese pizza, (4 ) cheeseburger
The opportunity cost of the eating turkey sandwich is A) the combined value of the tuna sandwich, slice of cheese pizza and cheeseburger. B) the value of tuna sandwich, the next best choice. C) the value of the cheeseburger. D) zero since she has satisfied a want.
Who is hurt and who benefits from inflation? Why?
What will be an ideal response?
Macroeconomic policies became more influenced by Keynes' theories starting with
A. the period of high inflation in the early 1980s. B. the period of high unemployment and high inflation in the 1970s. C. the Great Depression. D. the OPEC recession.