The Proposition That If Transaction Costs Are Low Enough, the Private

question 207

Multiple Choice

The proposition that if transaction costs are low enough, the private market can achieve an efficient outcome regardless of which of the affected parties hold the property rights is known as the:

• A)Coase theorem.
• B)property rights paradigm.
• C)market rights theorem.
• D)green environment paradigm.

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Definitions:

External Failure Cost

External failure costs are expenses incurred when products or services fail to meet quality standards after being delivered to the customer, including returns, repairs, and lost sales.

Value-Added

The enhancement a company gives its product or service before offering the product to customers, increasing its value.

Non-Value-Added

Activities or processes that consume resources but do not add value to the product or service from the customer's perspective.

Total Lead Times

The aggregate time taken from the initiation of a process until its completion, often used in manufacturing to describe the period from ordering materials to the final product delivery.