The Proposition That Private Parties with Clearly Defined Property Rights

question 180

Multiple Choice

The proposition that private parties with clearly defined property rights and low transaction costs can resolve externalities problems on their own is called the:

• A) voluntary tax theorem.
• B) Bee theorem.
• C) Coase theorem.
• D) transaction cost theorem.

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Definitions:

Self-Liquidating Debt

A type of short-term loan that is used to finance a project or inventory that will generate enough income to pay back the loan.

Spontaneous Financing

Financing that arises naturally from the normal operation of a business, such as trade credit from suppliers.

Seasonal Working Capital

Additional funds a business may need at certain times of the year to manage increased operational activities.

Clean-Up Requirements

Environmental or legal directives that mandate the remediation of pollution or contaminants from a site.