Which of the following are qualifications of the Coase Theorem?
a. technical transaction costs must remain low and be unaffected if liability assignment is reversed
b. both parties must operate in a purely competitive market
c. one party quickly makes an offer the other is just willing to accept only when the information regarding payoffs is complete, certain and known to both parties
d. all of the above are correct
e. only a and c
e
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If the Fed's policies aim to increase aggregate demand, the Fed must fear
A) recession. B) a supply shock that increases aggregate supply. C) a supply shock that decreases potential GDP. D) stagflation. E) inflation.
Harry's Hookahs incurs $700,000 per year in explicit costs and $500,000 in implicit costs. The company earns $1.4 million in revenues and has $3.7 million in net worth. Based on this information, what is the economic profit for Harry's Hookas?
A) $200,000 B) $700,000 C) $900,000 D) $1.1 million