The Coase Theorem States That If Private Parties Can Negotiate

question 155

Multiple Choice

The Coase theorem states that if private parties can negotiate the purchase and sale of the right to perform activities that cause externalities, then they:

• A)can always arrive at efficient solutions to the problems caused by externalities.
• B)will never arrive at efficient solutions to the problems caused by externalities.
• C)will never perform activities that generate negative externalities.
• D)will always perform activities that generate positive externalities.

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Definitions:

Diseases

Medical conditions characterized by an abnormal state affecting the body or mind, often associated with specific symptoms and signs.

Consequences

The results or effects that naturally follow from a specific action or set of conditions.

Brutality

Savage physical violence; excessive or cruel force.

Position Of Attention

A military posture where one stands straight with feet together and hands at the sides, used to show respect or readiness.