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:

Plant Species

A category that ranks below genus and denotes a group of plants that share certain characteristics and are capable of interbreeding to produce fertile offspring.

Endangered Species

Species that are at risk of extinction due to a dramatic decline in their population or habitat.

Flowering Plants

Plants that belong to the group Angiosperms, characterized by bearing flowers in which seeds are enclosed within a fruit.

Mammals

A class of warm-blooded vertebrate animals that possess hair or fur, and whose females produce milk for feeding their young.