Refer to Figure 7.1. Suppose that instead of $350, Angus earns only $250 by playing the bagpipes, but all other earnings remain the same. If there is no ordinance against loud music, the Coase theorem predicts that
A) Dudley will pay Angus to not play the bagpipes.
B) Angus will pay Dudley so Angus can play the bagpipes.
C) Dudley will do nothing and Angus will mop floors.
D) no bargain can be reached between Angus and Dudley.
A
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According to the Bureau of Economic Analysis, household disposable income fell by 0.3 percent of August, 2012. If all else remains the same, what is the likely impact of this fall on the real interest rate?
A) The real interest rate will rise. B) The real interest rate will fall. C) A change in household disposable income will have no impact on the real interest rate. D) The impact on the real interest rate is ambiguous.
The equilibrium point represents the only price-quantity combination in a market that
a. causes both buyers and sellers to agree to a price increase b. causes both buyers and sellers to agree to a price decrease c. exactly matches the independent plans of buyers and sellers d. allows buyers to purchase what they want e. allows sellers to earn a profit