The Coase Theorem Claims That in the Case of Tobacco

question 49

Multiple Choice

The Coase theorem claims that in the case of tobacco

• A) if victims are given the right to be free of a smoke-filled environment, then tobacco manufacturers will sell tobacco through underground markets.
• B) efficiency will occur only if smokers are given the right to smoke wherever they wish.
• C) efficiency will occur only if victims are given the right to be free of a smoke-filled environment.
• D) it does not matter who is given the property rights to the air, as long as the parties involved are allowed to bargain.

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