The Coase Theorem Says That, If the Appropriate Property Right

question 106

Multiple Choice

The Coase theorem says that, if the appropriate property right is assigned to __________, an efficient solution to an externality problem will be achieved.

• A)the party causing the externality
• B)the victim of the externality
• C)the party that can avoid the externality at the higher cost
• D)the party that can avoid the externality at the lower cost
• E)either one of the parties involved

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Definitions:

Efficiency

The ability to accomplish a task or goal using the least possible amount of time, effort, or resources.

Financial Crisis

A situation where the value of financial institutions or assets drops significantly, often leading to panic or economic downturn.

Employee Skills

Refers to the abilities and competencies that individuals possess, which enable them to perform specific tasks and roles effectively within a workplace.

Rewards and Incentives

Tools or benefits used to motivate individuals towards achieving certain goals or desired behaviors within an organizational context.