Which of the Following Is Not a Necessary Condition for the Coase

question 509

Multiple Choice

Which of the following is not a necessary condition for the Coase theorem?

• A) Property rights are clearly defined.
• B) There are no bargaining costs.
• C) The government intervenes to internalize the externality.
• D) There are only a few parties involved.

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Definitions:

Negative Contrast Effects

A psychological phenomenon where an individual's perception of an option is negatively influenced by a comparison with a better option.

Reinforcement

A process in operant conditioning that increases the likelihood of a behavior being repeated, which can be either positive (by adding a stimulus) or negative (by removing a stimulus).

Negative Contrast Effect

The effect in which a shift from high to low reward magnitude produces a lower level of responding than if the reward magnitude had always been low.

Reward

A beneficial stimulus that increases the likelihood of a behavior being repeated when it follows that behavior.