The Proposition That If Private Parties Can Bargain Without Cost

question 157

Multiple Choice

The proposition that if private parties can bargain without cost over the allocation of resources,they can solve the problem of externalities on their own,is called

• A)the transaction cost theorem.
• B)a corrective tax.
• C)the externality theorem.
• D)the Coase theorem.

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Definitions:

Preoperational

A stage in Piaget's theory of cognitive development where children from about 2 to 7 years old are able to engage in symbolic play but not yet capable of logical thought.

Sensorimotor Stage

The first stage in Piaget's theory of cognitive development, during which infants learn about the world primarily through their senses and motor activities.

Piaget

Jean Piaget was a Swiss psychologist known for his theory of cognitive development that describes how children construct a mental model of the world.

Sight

The sense that allows for the perception of visual stimuli, mediated by the eyes and processed by the brain.