The Coase Theorem Points Out That Externality Problems Can Be

question 141

Multiple Choice

The Coase Theorem points out that externality problems can be eliminated if the number of parties involved is small and if property rights

• A) are eliminated.
• B) are granted to either consumers or producers and transactions costs are low.
• C) are granted solely to producers.
• D) are granted solely to consumers.

Understand the principle of utility and how it motivates consumer behavior.

Acknowledge the scientific method as a process of inquiry in economics.

Differentiate between normative and positive economics.

Appreciate the role of purposeful behavior in economic decision-making.

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