Generally,the Coase Theorem Implies That the Initial Allocation of a Property

Question 37

Multiple Choice

Generally,the Coase Theorem implies that the initial allocation of a property right: A)determines all aspects of the final outcome of the negotiated agreement. B)does not determine which person will be entitled to engage in the externality generating activity,but does determine which person will receive compensation. C)determines which person will be entitled to engage in the externality generating activity,but does not affect which person will receive compensation. D)must be assigned to the person with the greatest costs.

Related questions

Q 38

Curly and Moe are considering living alone or being roommates and splitting the rent for the next twelve months.If they live alone,they each rent a one bedroom,one bath apartment for $500 per month,while if they are roommates,they can split a two bedroom,one bath apartment for $800 per month.The one difficulty they have is that Moe snores very loudly.Curly estimates the cost of poor sleep due to Moe's snoring at $150 per month.Moe could obtain a snore-eliminating device for $50 per month. Refer to the information given above.The least costly solution to the externality present in this situation is for: A)Curly to endure Moe's snoring. B)both to live alone. C)Moe to eliminate his snoring. D)Moe to pay Curly for his discomfort.

Q 39

Curly and Moe are considering living alone or being roommates and splitting the rent for the next twelve months.If they live alone,they each rent a one bedroom,one bath apartment for $500 per month,while if they are roommates,they can split a two bedroom,one bath apartment for $800 per month.The one difficulty they have is that Moe snores very loudly.Curly estimates the cost of poor sleep due to Moe's snoring at $150 per month.Moe could obtain a snore-eliminating device for $50 per month. Refer to the information given above.The actual monthly gain in surplus to Curly and Moe from living together after addressing the snoring problems in the least costly way is: A)$200. B)$150. C)$100. D)$50.

Q 40

Curly and Moe are considering living alone or being roommates and splitting the rent for the next twelve months.If they live alone,they each rent a one bedroom,one bath apartment for $500 per month,while if they are roommates,they can split a two bedroom,one bath apartment for $800 per month.The one difficulty they have is that Moe snores very loudly.Curly estimates the cost of poor sleep due to Moe's snoring at $150 per month.Moe could obtain a snore-eliminating device for $50 per month. Refer to the information given above.Curly would be willing to pay _____ per month to eliminate Moe's snoring. A)exactly $50 B)no more than $100 C)up to $150 D)nothing