The Coase Theorem Is the Proposition That If the Number

question 125

Multiple Choice

The Coase Theorem is the proposition that if the number of involved parties is low, if property rights _______ and transactions costs are _______, then private transactions are efficient.

• A) exist; low
• B) are nonexistent; low
• C) exist; high
• D) are nonexistent; high

---

Definitions:

Efficient Market

A market in which prices fully reflect available information and adjust quickly to new data.

Opportunity Costs

The cost of foregoing the next best alternative when making a decision or choice.

Post Hoc, Ergo Propter Hoc

A logical fallacy that suggests that because one event followed another, the first event caused the second.

Inductive Reasoning

the process of making generalizations based on specific observations or instances.