The assumptions needed for the Coase theorem to work:
A) are often observed in the real world.
B) often do not hold true in the real world.
C) never hold true in the real world.
D) always hold true in the real world.

Question

Quizplus · Accepted Answer

The assumptions needed for the Coase theorem to work, such as clear property rights, no transaction costs, perfect information, and rational decision-making, often do not hold true in the real world. Therefore, the Coase theorem is more of an abstract economic concept than a practical policy guideline in most situations.

The Assumptions Needed for the Coase Theorem to Work