What Economic Argument Suggests That If Transactions Costs Are Sufficiently

question 506

Multiple Choice

What economic argument suggests that if transactions costs are sufficiently low, the equilibrium is economically efficient regardless of how property rights are distributed?

• A) the Coase theorem
• B) the laws of supply and demand
• C) the law of comparative advantage
• D) the law of externalities

---

Definitions:

Owner's Capital

The total value of equity that a business owner has invested in their company, which may increase through profits or additional contributions.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or within the business's operating cycle, whichever is longer.

Prepaid Insurance

An asset account that represents insurance payments made in advance for future coverage periods.

Accounts Receivable

Money owed to a company by customers for products or services that have been delivered or used, but not yet paid for.