Which of the following statements is true?
A. The lower transaction costs are, the more likely individuals will solve negative externality problems through a voluntary exchange.
B. The higher transaction costs are, the more likely individuals will solve negative externality problems through a voluntary exchange.
C. Coase agrees with Pigou that taxing those activities associated with negative externalities is a good idea.
D. a and c
E. none of the above
Answer: A
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Refer to Table 7-6. With trade, what is the total gain in belt production?
A) 20 B) 40 C) 60 D) 120
What does it mean for a good to be non-rival in consumption?
What will be an ideal response?
The long run is referred to as a planning horizon because:
a. the firm has committed to a fixed quantity of at least one resource and the other resources are variable. b. the manager has selected the size of the firm that appears to be the least profitable and does not have the option of selecting any other plant size. c. the firm has not committed to a fixed quantity of any resource and has all options available to it. d. the manager has selected a scale of production. e. the firm is operating along a specific average-cost curve.
The term price taker is used to describe a situation in which consumers have no influence over the market price for a good or service and must take whatever price is set by the economically powerful firms
a. True b. False