The Coase Theorem Posits That Externality Problems Can Be Solved

question 238

Multiple Choice

The Coase theorem posits that externality problems can be solved without government intervention:

• A) when transaction costs are low and property rights are clearly defined.
• B) when trading in tradable allowances occurs.
• C) if markets can reach the efficient quantity and if transaction costs exceed the deadweight loss caused in the market.
• D) only rarely, that in general, markets cannot maximize social surplus.

---

Definitions:

Research Findings

The outcomes, results, or conclusions drawn from scientific experiments or investigations.

Idiographic

Pertaining to the study or method of understanding the unique aspects of individual cases or entities.

High Reliability

Refers to systems or organizations operating in a manner that minimizes errors and maximizes safety and efficiency.

Inadequate Standardization

A situation where procedures, methods, or practices lack consistency or uniformity, leading to variability in outcomes or assessments.