Suppose a steel mill pollutes the lake and harms a fishing firm. Under a Coase bargaining solution, an efficient solution exists between the two entities if:
A. the property rights to the lake is assigned to the fishing firm.
B. the property rights to the lake is assigned to the steel firm.
C. the property rights to the lake is assigned to the government.
D. the property rights to the lake is assigned, regardless to whom it is assigned, the steel mill or the fishing firm.
Answer: D
You might also like to view...
The performance of diversified companies
A) is always greater than the performance of more narrowly focused firms. B) can be seen in greater economic profits. C) usually is greater than the overall economy. D) often simply mirrors the general economy.
The impact of recession
a) is, in the aggregate, a more significant factor in social welfare than long run growth b) is more severe for professionals than for semi-skilled manual laborers c) is more severe for skilled workers than for unskilled workers d) causes larger declines in consumption among those aged 26 to 45 than among teenagers e) is most severe for the poorest members of society
Engineers for The All-Terrain Bike Company have determined that a 15% increase in all inputs will cause a 15% increase in output. Assuming that input prices remain constant, you correctly deduce that such a change will cause ________ as output increases.
A. marginal costs to increase B. average costs to increase C. average costs to decrease D. average costs to remain constant
Best Lights wants to prevent Bright Lights from entering the light bulb market. If Best Lights advertises that it will always undercut any competitor's price, the effect of advertising ________ Best Lights' profits due to its cost and ________ Best Lights' profits due to a(n) ________ in its demand.
A) decreases; increases; increase B) decreases; decreases; decrease C) increases; increases; increase D) decreases; decreases; increase