According to the Coase Theorem, Externalities

question 184

Multiple Choice

According to the Coase theorem, externalities

• A)must usually be internalized by taxation or subsidy.
• B)can be internalized by the market under certain conditions.
• C)result when firms fail to maximize profits.
• D)cannot be internalized if property rights are assigned.
• E)are not relevant to the issue of market failure.

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Definitions:

Nurses' Wages

Compensation paid to nursing professionals, influenced by factors like location, experience, and education level.

Marginal Resource Cost

The additional cost incurred by using one more unit of a resource in the production process, often linked to labor or material inputs.

Labor Market

encompasses the supply of labor (workers seeking employment) and demand for labor (employers seeking workers) within an economy, influencing wages and employment levels.

Monopsonistic Labor Market

A labor market characterized by a single large buyer of labor, which results in lower wages and decreased employment levels compared to competitive markets.