The Coase Theorem Suggests That Private Markets May Not Be

question 114

Multiple Choice

The Coase theorem suggests that private markets may not be able to solve the problem of externalities

• A)if the government does not become involved in the process.
• B)when the number of interested parties is large and bargaining costs are high.
• C)if the firm in the market is a monopoly.
• D)if some people benefit from the externality.

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Definitions:

Behavior

The actions or reactions of an individual or group in response to external or internal stimuli.

Furious

Extremely angry; full of rage or intense emotion.

Primary Motor Cortex

A region of the brain responsible for the initiation of voluntary muscle movements.

Frontal Lobe

The part of the brain located at the front of each cerebral hemisphere, responsible for problem solving, judgment, motor function, and speech among other functions.