Assuming that transactions costs are sufficiently low, the Coase theorem results in the economic pie being maximized. What impact do legal constraints have on this prediction of the Coase theorem?
What will be an ideal response?
Legal restraints will not affect the total amount of income, but they will affect the shares of that income that go to each party to the transaction.
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In an inflationary environment, then over time
A) a specific tariff will tend to raise more revenue than an ad valorem tariff. B) an ad valorem tariff will tend to raise more revenue than a specific tariff. C) an optimum tariff will tend to raise more revenue than an escalating tariff. D) a tariff quota will tend to raise more revenue than a specific tariff. E) an import quota would raise more revenue than a specific tariff.
Net tax is calculated by adding the amount collected as taxes by the government and the amount spent as transfer payments
a. True b. False Indicate whether the statement is true or false