Author Question: According to the Coase Theorem, private solutions to externalities can lead to the socially ... (Read 59 times)

Mr.Thesaxman · **on:** Jun 30, 2018

According to the Coase Theorem, private solutions to externalities can lead to the socially efficient outcome when: i. transaction costs are negligible ii. property rights are clearly defined iii. the number of parties involved is small
a. (i), (ii), and (iii)
b. (i) and (ii) only
c. (iii) only
d. (ii) and (iii) only

Question 2

Nascent industries require adequate protection from foreign competition because:
a. they experience economies of scale.
b. they experience diseconomies of scale.
c. the quality of the products of such industries are comparatively inferior than the products of their foreign competitors.
d. they do not have adequate resources to undertake research and development.
e. their initial costs of production are considerably higher than the foreign firms.