The Coase theorem asserts that the private market will always solve the problem of externalities and allocate resources efficiently
a. even if private parties experience substantial costs of bargaining.
b. even if the initial distribution of legal rights is skewed in favor of some private parties over others.
c. only when there is a large number of private parties that engage in bargaining.
d. All of the above are correct.
b
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Demand for a good will tend to be more price elastic if it exhibits which of the following characteristics?
A) It accounts for a small part of the consumer's total income. B) The good has many available substitutes. C) It is a non-durable (as opposed to a durable good). D) There is little time for the consumer to adjust to the price change.
Changes in expectations about future price levels:
A. affect both the long-run aggregate supply curve and the short-run aggregate supply curve. B. do not affect either the long-run aggregate supply or the short-run aggregate supply curve. C. affect only the long-run aggregate supply curve. D. affect only the short-run aggregate supply curve.