The Coase Theorem States That,in the Presence of Externalities,a Market

question 136

Multiple Choice

The Coase theorem states that,in the presence of externalities,a market economy will:

• A)always reach an efficient solution.
• B)never reach an efficient solution.
• C)reach an efficient solution if transaction costs are sufficiently low and property rights are well-defined.
• D)reach an efficient solution only in the case of government regulation.

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Definitions:

Diethylstilbestrol

A synthetic estrogen that was prescribed to pregnant women to prevent miscarriages, later linked to various health issues in their offspring.

Teratogens

Agents that can cause malformations or defects in an embryo or fetus when a mother is exposed during pregnancy.

Blastocyst

A stage of early embryonic development characterized by a hollow, fluid-filled structure of cells, occurring before implantation in the uterine wall.

Placenta

A structure that forms within the uterus during pregnancy, which supplies the fetus with oxygen and nutrients, while also eliminating waste materials from the fetus's bloodstream.