Author Question: Transactions costs are the A) costs of using the Coase theorem. B) opportunity costs of ... (Read 80 times)

EY67 · **on:** Jun 29, 2018

Transactions costs are the

A) costs of using the Coase theorem.
B) opportunity costs of conducting a transaction.
C) external marginal costs of the externality.
D) reason why taxes cannot affect the inefficiency resulting from an external cost.
E) external costs when a firm pollutes.

Question 2

In the figure above, if the firm is regulated using an average cost pricing rule, the economic loss created is equal to the area of

A) ABG.
B) BEFG.
C) BCFG.
D) BCE.
E) None of the above because there is no economic loss created.