The Coase Theorem States That When Transaction Costs Are Low

question 64

Multiple Choice

The Coase theorem states that when transaction costs are low and property rights are enforced,then:

• A)bargaining between parties will never lead to an efficient outcome.
• B)bargaining between parties will lead to an efficient outcome only if liability is placed on the party that is responsible for the externality.
• C)bargaining between parties will lead to an efficient outcome only if the liability is placed on the people affected by the externality.
• D)bargaining between parties will lead to an efficient outcome regardless of where liability is placed.

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Definitions:

GDP Per Capita

The gross domestic product divided by the population, serving as an indicator of a country's economic performance and standard of living.

Developing Countries

Nations with lower levels of industrialization, income, and quality of life, often characterized by efforts towards economic development.

United States

A country located in North America, comprising 50 states and known for its significant influence on global economics, politics, and culture.