What do you mean by Coase theorem?
Coase theorem suggests that the market mechanism can take care of the problem and even obtain an optimal outcome by negotiation between the individuals who produce the externalities and the individuals who are affected by them if property rights are well defined. It adds that no matter which of the two parties has the upper hand, the outcome of the negotiation will be the same.
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The above figure shows the U.S. market for flip-flops. With international trade, the United States imports ________ flip-flops
A) 400,000 B) 0 because the United States exports flip-flops C) 700,000 D) 300,000 E) 500,000
A unit of account
A) is a type of accounting of how many currency units there are in an economy. B) is an accounting of the total units of goods and services produced in an economy. C) is an agreed measure for stating the prices of goods and services in an economy. D) is a type of value stored within all assets.
Refer to Table 13-3. If this firm continues to produce, what is likely to happen to the product's price in the long run?
A) It will remain constant. B) It will fall. C) It will increase. D) It cannot be determined without information on its long run demand curve.
Mary decreases her consumption of Good X after the price of Good Y decreased. For Mary
A) Good X and Good Y are substitutes. B) Good X and Good Y are complements. C) Good X is an inferior good. D) Good Y is an inferior good.