According to the Coase Theorem, Private Parties Can Solve the Problem

question 22

Multiple Choice

According to the Coase theorem, private parties can solve the problem of externalities if

• A)the cost of bargaining is small.
• B)the initial distribution of legal rights favors the person being adversely affected by the externality.
• C)the number of parties involved is sufficiently large.
• D)All of the above are correct.

---

Definitions:

Sharps Container

A hard plastic container that is used to safely dispose of needles, scalpels, and other sharp medical instruments to prevent injury and infection.

Safety Cap

A protective cover designed to prevent accidental opening, often used on medication bottles.

Health Hazards

Physical, chemical, biological, or environmental factors that can cause harm or adverse health effects to individuals.

Gas Oven

A type of oven that uses natural gas or propane as its fuel source for cooking and baking.