AP® Microeconomics

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Difficult

Coase Theorem

APMICR-ZF9WNF

Which of the following reflects the basic concept behind the Coase Theorem?

A

it applies only to circumstances in which property ownership is clearly defined, externalities are extensive and bargaining costs are high.

B

it applies to situations where property rights cannot be determined, the parties involved are large and numerous, but externalities are minimal.

C

it states that in some circumstances majority voting will provide clear solutions to property rights disputes.

D

it suggests that in some circumstances government intervention is not needed to resolve property rights disputes

E

it applies to all circumstances where property rights are in dispute.