The Idea That Individuals Can Reach an Efficient Equilibrium Through

question 69

Multiple Choice

The idea that individuals can reach an efficient equilibrium through private trades,even in the presence of an externality,is called:

• A)the Coase theorem.
• B)market failure.
• C)trade quotas.
• D)the invisible hand.

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Definitions:

Organization Expense

Organization expense refers to the costs associated with forming a business entity, such as legal fees, filing fees, and costs of issuing stock.

Paid in Capital in Excess

Financial capital received from investors above the par value of the shares issued, also known as additional paid-in capital.

Common Stock

Equity ownership in a corporation, giving holders voting rights and a share in the company’s profits through dividends.

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily match its market value.