According to the Coase Theorem

question 95

Multiple Choice

According to the Coase Theorem

• A)when side payments are costly,the private market cannot solve any externality problem
• B)government intervention is needed to solve a negative externality problem
• C)government intervention is needed to solve a positive externality problem
• D)when side payments can be costlessly negotiated,the private market will solve any externality problem
• E)recourse to the legal system is the only way of eliminating negative externalities

---

Definitions:

Economic Loss

Financial damages suffered by an individual or business, often due to breach of contract, negligence, or other wrongful actions.

Zoning By-Laws

Regulations established by local governments detailing the permissible uses for different areas or zones within a municipality.

Real-Estate Agent

A licensed professional who represents buyers or sellers in real estate transactions, providing guidance, negotiation, and expertise.

Contaminated Cola

A scenario or product where cola or soft drink is tainted or polluted, causing potential harm to consumers.