The Coase Theorem Asserts That, If Externalities Are Present and If

question 226

Multiple Choice

The Coase theorem asserts that, if externalities are present and if private parties can bargain over the allocation of resources at no cost, then

• A)the private market will reach an equilibrium in which resources are allocated inefficiently.
• B)the private market will reach an equilibrium in which resources are allocated efficiently.
• C)the private market cannot reach an equilibrium.
• D)a mixture of corrective taxes and subsidies is necessary for a socially optimal equilibrium.

---

Definitions:

Categorical Data

Data that can be divided into specific groups or categories based on qualitative characteristics.

Variances

A measure of the dispersion indicating how far individual numbers in a dataset are from the mean.

Bimodal Distribution

A probability distribution with two different modes or peaks, representing two prevalent outcomes or characteristics in a dataset.

Variance

A measure of dispersion that indicates the average squared deviation of each number in a set from the mean of the set.