The Idea That Resource Allocation Can Remain Efficient, Even in the Presence

question 39

Multiple Choice

The idea that resource allocation can remain efficient, even in the presence of externalities, as long as property rights are clearly assigned and transactions costs are low is referred to as the:

• A) Law of Demand.
• B) Black/Schloes Formula.
• C) Coase Theorem.
• D) Law of Diminishing Returns.

---

Definitions:

Rent Payments

Periodic payments made by tenants to landlords in exchange for the use of residential or commercial property.

Lease Term

The duration for which a lease agreement is effective, specifying the start and end dates of the rental period.

Caveat Emptor

A Latin phrase meaning "let the buyer beware," indicating that the buyer takes the risk regarding the quality and condition of the product.

Marketable Title

A title to real property that is free from significant encumbrances or defects, and thus can be sold or transferred easily to another party.