The Coase Theorem Suggests That Private Solutions to an Externality

question 343

Multiple Choice

The Coase theorem suggests that private solutions to an externality problem

• A)are effective under all conditions.
• B)will usually allocate resources efficiently if private parties can bargain without cost.
• C)are only efficient when there are negative externalities.
• D)may not be possible because of the distribution of property rights.

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Definitions:

Human Capital

The collective skills, knowledge, and expertise that employees bring to an organization, considered an asset in improving productivity and enhancing organizational value.

Ethical Practices

Conduct that adheres to guidelines or principles that determine right and wrong behavior within a specific context.

Core Competencies

Core competencies are special strengths that give an organisation a competitive advantage.

Organisational Controls

Mechanisms put in place within an organization to guide, regulate, and monitor its activities towards achieving set objectives.