The Coase Theorem States That

question 270

Multiple Choice

The Coase theorem states that

• A)taxes are an efficient way for governments to remedy negative externalities.
• B)subsidies are an efficient way for governments to remedy positive externalities.
• C)industrial policies encourage technology spillovers.
• D)in the absence of transaction costs, private parties can solve the problem of externalities on their own.

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Definitions:

IRR

The Internal Rate of Return is a financial indicator utilized to evaluate the potential returns of investments.

Bid Price

The highest price that a buyer is willing to pay for a security.

Scenario Analysis

A process of analyzing possible future events by considering alternative possible outcomes (scenarios), often for the purpose of planning through uncertainty.

Sensitivity Analysis

Analyzes how different values of an independent variable affect a particular dependent variable under a given set of assumptions.