Question

16. The Coase theorem states that

a.    the level of pollution should be equal to zero to maximize social net benefit.

b.    profit making producers pollute because they are forced to.

c.    the efficient level of output is where marginal social cost equals marginal benefit.

d.    if property rights exist and are enforced, private transactions are efficient.

11. The agreement between manufacturers and distributors in which manufacturers who do refuse the pricing suggestion are not able to sell their products is ___; whereas if a distributor prevents all of its retail outlets from selling any other competing soft drink, it is engaged in ___.

a.    resale price maintenance; an exclusive deal.

b.    an interlocking dealership chain; a tying agreement.

c.    always inefficient; territorial confinement.

d.    a tying arrangement; a requirement contracts

Answer 1