The Coase Theorem States That

question 23

Multiple Choice

The Coase Theorem states that

• A) If bargaining is difficult, then regardless of how property rights are assigned, voluntary agreements between parties will remedy the market failures associated with externalities and restore economic efficiency
• B) If bargaining is frictionless, then the initial assignment of property rights determines the market failures associated by externalities and voluntary agreements between private parties are useless
• C) If bargaining is frictionless, then regardless of how property rights are assigned, voluntary agreements between private parties will remedy the market failures associated with externalities and restore economic efficiency
• D) If bargaining is frictionless, market failures must be remedied by government intervention

---

Definitions:

Geographic District

A defined area within a country, often used for administrative, legal, or electoral purposes.

Original Jurisdiction

The power of a court to hear a case for the first time, as opposed to on appeal.

Venue

The geographical location in which a court with jurisdiction may hear and decide a case.

Sliding-Scale Standard

A varying measure of assessment that adjusts based on different factors or conditions, often used in determining fees based on one's ability to pay.