The Coase Theorem does not imply which of the following?
A)Resources will be allocated efficiently in the absence of transactions costs.
B)Resources will move to their highest valued use in there are no transactions costs.
C)The initial allocation of property rights does not matter to the parties involved.
D)The allocation of resources is independent of the assignment of property rights if transactions costs are zero.

Question

Quizplus · Accepted Answer

The Coase Theorem implies that the initial allocation of property rights does matter because it affects the distribution of wealth and bargaining power among the parties, even if it does not affect the efficiency of the resource allocation in the absence of transaction costs.

The Coase Theorem Does Not Imply Which of the Following