If an environmental group wanted to prevent the habitat destruction of the Wyoming pocket gopher, the Coase theorem would direct the group to
A) try to get laws enacted to protect the species.
B) bargain in order to obtain the property rights of the gopher habitat.
C) physically block any efforts to destroy the habitat.
D) protest the destruction while gaining media attention for their cause.

Question

Quizplus · Accepted Answer

The Coase theorem suggests that if property rights are clearly defined and transaction costs are low, parties can negotiate to resolve conflicts over resource allocation in a way that maximizes economic efficiency. In this case, the environmental group could negotiate to obtain the property rights of the gopher habitat, thereby directly controlling and preventing its destruction.

If an Environmental Group Wanted to Prevent the Habitat Destruction