The Coase Theorem States That

question 486

Multiple Choice

The Coase theorem states that

• A)under certain circumstances government intervention is not needed to reach efficient outcomes when an externality is present.
• B)government intervention is always required to reach an efficient outcome when an externality is present.
• C)government intervention cannot lead to an efficient outcome when an externality is present.
• D)only negative externalities can be resolved using government intervention.

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Definitions:

Fads

Temporary, highly popular trends or behaviors that spread quickly and are followed with enthusiasm, but fade away just as quickly.

Demographic Shifts

Changes in the characteristics of a population over time, which can include age, ethnicity, gender distribution, and so forth.

Social Change

The transformation of culture, behavior, social institutions, and social structure over time, often seen as a necessary aspect of societal progress or development.

Emergent Norm Theory

A sociological hypothesis that posits individuals in a crowd behave not out of pre-existing norms, but from norms that emerge and are accepted within the crowd during the event.