Compare two situations. (A ) A firm is not legally responsible for damages that result from air pollution caused by its production of steel. (B ) A firm is legally responsible for damages that result from its production of steel
Ronald Coase argued that if the property rights are assigned and transactions costs are low
A) bargaining between the firm and the victims of the air pollution caused by the firm would lead to an equal reduction in pollution in situation (A ) and situation (B ).
B) bargaining between the firm and the victims of the air pollution caused by the firm would lead to a greater reduction in pollution in situation (A ) than situation (B ).
C) bargaining between the firm and the victims of the air pollution caused by the firm would lead to a smaller reduction in pollution in situation (A ) than situation (B ).
D) bargaining between the firm and the victims of the air pollution caused by the firm will result in little reduction of pollution in either situation (A ) or (B ) because the firm has greater economic and political power than the victims.
A
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Which of the following markets most closely matches the description of perfect competition?
a. Fast-food hamburgers. b. Subcompact cars. c. Grain. d. Personal computers.
The most plausible reason why changes in the price of cotton can cause shifts in the supply curve for tobacco is:
A. cigarette smokers often wear cotton shirts. B. when incomes rise, people consume more cotton and tobacco. C. firms can switch from growing tobacco to cotton and vice versa. D. tobacco is an input in the production of cotton.