The Coase theorem states that if transaction costs are low, the number of parties is small, and property rights are well established
A) the government must intervene to eliminate any externalities in the market.
B) private transactions are efficient.
C) there will be no pollution.
D) Both answers B and C are correct.
B
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What would be the output combination for two products A and B on the production possibility frontier, if a country uses its entire resources for producing A?
a. A - Maximum; B - Zero b. A- Maximum, B - Maximum c. A - Zero, B - Maximum d. A - Zero, B - Minimum
Real GDP is obtained by # randomize
A. Nominal GDP divided by GDP deflator. B. Nominal GDP multiplied by price level. C. Nominal GDP minus GDP deflator. D. Nominal GDP divided by CPI. 2) The standard of living is often measured by: # randomize A. Real GDP per capita B. Real GDP C. Real GDP multiplied by population D. Real GDP plus depreciation
Moral hazard and adverse selection are both examples of:
a. the principal-agent problem. b. asymmetric information. c. externalities in consumption. d. perfect information. e. efficiency in markets.
Suppose that a study is released stating that the fewer speeding tickets a person is issued, the less gasoline they tend to purchase. This is best described as an example of
A. positive correlation. B. negative correlation. C. positive causation. D. negative causation.