Refer to Fact Pattern 18-1

question 17

Multiple Choice

Refer to Fact Pattern 18-1.Holly,a professional driver,buys an Excel from Fine to drive in a Grand Prix race.Holly's Excel is

• A)a consumer good.
• B)an accession.
• C)equipment.
• D)inventory.

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Definitions:

Coase Theorem

A principle that asserts that if property rights are well-defined and transaction costs are negligible, parties will negotiate to correct externalities and allocate resources efficiently.

Private Market

A private market is a part of the financial market in which investments are negotiated directly between parties, without public market listing.

Externalities

Unintended outcomes from business transactions impacting external groups, not included in the product or service pricing.

Coase Theorem

A principle that asserts that when trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property.