The Coase theorem asserts that, in the presence of externalities,
a. private economic actors sometimes can reach a bargain that produces an efficient outcome.
b. private economic actors always can reach a bargain that makes everyone better off.
c. private solutions cannot be very effective.
d. corrective taxes cannot be very effective.
a
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The assumptions about tastes and behavior to model the trading between two people do NOT include
A) utility maximization. B) convex indifference curves. C) nonsatiation. D) interdependence.
Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Currently in sector Y, price is
A. equal to average cost. B. less than average cost. C. greater than average cost. D. More information is needed to answer the question.