Question 1
If ________ bargaining to resolve an externality is to result in an efficient outcome, the initial assignment of rights must be clear to ________ parties.
◦ public; only government-sponsored
◦ public; at least one
◦ private; at least one
◦ private; both
Question 2
Which of the following conditions are necessary for the Coase theorem to apply?
◦ The basic rights of the individuals must be clearly understood.
◦ There must be no impediments to bargaining.
◦ Only a few people can be involved.
◦ All of these