Which of the following situation would make transaction costs too high to negotiate and therefore the Coase Theorem would not apply?
A. Only a few people are bothered by the pollution in the area
B. Many people are bothered by pollution in the area
C. Many firms are in the area with different levels of pollution
D. One firm is the cause of the pollution
Answer: C
You might also like to view...
For many consumption activities — skiing, for example — the activity becomes more enjoyable as the consumer becomes more experienced
Assuming that "training consumption" is inexpensive relative to "proficient consumption," do such activities make it more or less likely that a borrowing constraint will be binding?
Additions to inventory are
A) not counted as an expenditure in GDP accounting. B) counted as an intermediate input. C) counted as a component of investment spending. D) subtracted from sales revenue in calculating profit income.