According to the Coase Theorem, Externality Problems May Be Solved

question 57

Multiple Choice

According to the Coase theorem, externality problems may be solved if the parties involved can negotiate. Which of the following is also required for an efficient solution?​

• A)Clearly defined bargaining costs and low transaction costs
• B)Enforceable bargaining costs and high transaction costs​
• C)Enforceable property rights and low bargaining costs​
• D)Enforceable property right and high bargaining costs​
• E)Government intervention​

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Definitions:

Wilmot Proviso

A proposed amendment to a bill in the U.S. Congress in 1846 aiming to ban slavery in territory acquired from Mexico.

Fugitive Slave Law of 1850

Part of the Compromise of 1850, this law required citizens to assist in the capture of runaway slaves and denied fugitives the right to a jury trial.

Northwest Ordinance

A law passed in 1787 by the Congress of the Confederation of the United States to create a structured process for territories in the Northwest to become states.

Missouri Compromise

A legislative agreement passed in 1820 between the pro-slavery and anti-slavery factions in the United States Congress, involving primarily the regulation of slavery in the western territories.