The Coase theorem emphasizes the importance of _______ in the efficient allocation of resources when external costs are present.

Question

Quizplus · Accepted Answer

The Coase theorem focuses on the importance of well-defined property rights because it suggests that if property rights are clearly defined, the parties involved can negotiate and come to an efficient solution regarding external costs without the need for regulation or intervention by the government. The other options (A, B, C) are all potential solutions to addressing external costs, but the Coase theorem emphasizes the role of property rights as a starting point for efficient allocation of resources.

The Coase Theorem Emphasizes the Importance of _______ in the Efficient