Suppose a Negative Externality Exists in a Market

question 169

Multiple Choice

Suppose a negative externality exists in a market.If transactions costs are low and parties are willing to bargain, then, according to the Coase theorem,

• A)an efficient solution can be reached only if property rights are assigned to the victims of the pollution.
• B)an efficient solution can be reached only if property rights are assigned to the polluters.
• C)an efficient solution can be reached regardless of the initial assignment of property rights.
• D)government intervention is critical to reach an efficient solution.

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Definitions:

Reading Speed

The rate at which a person can read text, often measured in words per minute (wpm), which can be influenced by the reader's skill, the complexity of the text, and the purpose of reading.

Adult Reading

The practice or ability of reading and comprehending texts commonly undertaken by individuals post-adolescence.

Iconic Memory

A type of visual sensory memory that retains an exact copy of what is seen, lasting only a fraction of a second.

Working Memory

A cognitive entity of limited scope, tasked with the interim preservation of information for processing.