When Property Rights Are Assigned and Transactions Costs Are Low

question 95

Multiple Choice

When property rights are assigned and transactions costs are low,

• A) all costs and benefits are taken into account by the transacting parties so the transaction is efficient.
• B) externalities will result in market failure.
• C) the marginal social benefit curve shifts leftward and the marginal social cost curve does not shift.
• D) the marginal social cost curve shifts rightward and the marginal social benefit curve does not shift.
• E) the marginal social cost curve shifts rightward and the marginal social benefit curve also shifts rightward.

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Definitions:

Obligations

Duties or responsibilities imposed by law, contract, or conscience that one party owes to another.

Assign Partnership Interest

The transfer of a partner's ownership interest in a partnership to another party, subject to the terms of the partnership agreement.

Ceases to Be a Partner

Occurs when an individual no longer holds the status of a partner in a partnership, possibly due to withdrawal, expulsion, or agreement termination.

General Partner

A type of owner in a partnership who is responsible for the operations of the company and is liable for its debts.