Which of the following is true of the Coase theorem?
A)The market generally ensures an efficient allocation of resources.
B)The assignment of property rights determines the allocation of resources.
C)Bargaining between parties can lead to an efficient allocation of resources if property rights are well defined.
D)Private benefits exceed social benefits when property rights are ensured.

Question

Quizplus · Accepted Answer

The Coase theorem states that bargaining between parties can lead to an efficient allocation of resources if property rights are well defined. It emphasizes the role of property rights in economic efficiency, but does not necessarily suggest that the market always ensures efficient allocation of resources. Private benefits may exceed social benefits when property rights are not well defined, leading to inefficient allocation of resources.

Which of the Following Is True of the Coase Theorem