The Coase Theorem States That

question 70

Multiple Choice

The Coase theorem states that

• A)transaction costs consist of marginal private costs and marginal social costs and are higher when exchange is subject to increasing marginal costs.
• B)transaction costs are the difference between marginal social costs and marginal private costs and are higher when exchange is subject to decreasing marginal costs.
• C)when transaction costs are significant, the resource-allocative outcome will be the same regardless of who is assigned the property rights.
• D)when transaction costs are insignificant, the resource-allocative outcome will be the same regardless of who is assigned the property rights.

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Definitions:

Agricultural Soil

Soil that is used or suitable for farming activities, characterized by its fertility and ability to support crop production.

Loam

A rich soil blend, containing a balance of silt, sand, and clay, along with organic matter.

Epiphytes

Plants that grow on other plants for physical support but do not derive nutrients from them, obtaining moisture and nutrients from the air, rain, and sometimes from debris accumulating around them.

Aerial Roots

Roots that are not buried in soil but instead hang in the air, found in certain plants, where they absorb moisture from the atmosphere and sometimes aid in attachment.