The Coase Theorem Says That When Information Is Free

question 30

Multiple Choice

The Coase theorem says that when information is free:

• A)there will be more externalities.
• B)the allocation of resources is Pareto- optimal.
• C)people will over consume information.
• D)there will be more free riders.

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Definitions:

Utility

In economics, utility is a measure of the satisfaction or happiness that a consumer derives from consuming goods and services.

Mayor

An elected official who acts as the head of a city, town, or municipality, responsible for implementing and overseeing local government policies and functions.

Social Welfare

The well-being of a community in terms of health, prosperity, and happiness, often considered in economics and social policy decision-making.

Utility Function

A representation in economics of how a consumer ranks different goods or bundles of goods, based on the level of happiness, satisfaction, or utility they provide.