Answer the following statement(s) true (T) or false (F)
1. In the absence of transactions costs, changes in property rights have no effect on economic efficiency.
2. In the absence of transactions costs, changes in property rights have no effect on the distribution of income.
3. Changes in property rights will not affect the allocation of resources as long as transactions costs are zero and the subsequent effects on market demand are negligible.
4. The weak Coase theorem is true when reallocation of property rights have negligible income effects .
5. According to the Coase Theorem, in the absence of transactions costs, recipients of an external benefit can be expected to offer a bribe in exchange for greater production.
1. True
2. False
3. True
4. False
5. True
You might also like to view...
In the above figure, what amount of subsidy per student would government have to provide to colleges if its desired objective was to achieve an efficient level of education, 50 million students per year?
A) $6,000 per year B) $12,000 per year C) $18,000 per year D) $27,000 per year
Which of the following statements best describes equilibrium?
a. The area above the point where the supply curve (S) and the demand curve (D) cross is called the equilibrium. b. The area below the point where the supply curve (S) and the demand curve (D) cross is called the equilibrium. c. The point where the supply curve (S) and the demand curve (D) cross is called the equilibrium. d. Any point above where the supply curve (S) and the demand curve (D) cross is called the equilibrium.
Among the impediments to the international mobility of capital are
a. restrictions on foreign ownership. b. fear of nationalization or political instability. c. fluctuations in exchange rates. d. All of the above are correct.
Suppose that on Monday, a Big Mac cost $3.00 in the United States and 320 Japanese yen in Japan. On Monday, the exchange rate was $1 = 90 yen. According to the purchasing power parity theory, the yen was __________ by approximately __________ percent
A) overvalued; 22 B) undervalued; 40 C) overvalued; 29 D) undervalued; 19 E) overvalued; 19