The Coase Theorem Posits That Externality Problems Can Besolved Without

question 101

Multiple Choice

The Coase theorem posits that externality problems can besolved without government intervention

• A)when transaction costs are low and property rights are clearly defined.
• B)when trading in tradeable allowances occurs.
• C)if markets can reach the efficient quantity and if transaction costs exceed the deadweight loss caused in the
• Market.
• D)only rarely, that in general markets cannot maximize social surplus.

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