Question

the coase theorem suggests that the government does not have to be involved at all in resolving a market failure due to externalities. true false question 29 2 pts an improvement in the technology of pollution control is likely to increase societys optimal amount of pollution abatement. true false

Explanation:

The Coase theorem states that if property rights are well - defined and transaction costs are low, private parties can bargain to an efficient outcome without government intervention. But in reality, high transaction costs and unclear property rights often exist, so government may be needed. For the second statement, better pollution control technology reduces the cost of abatement, making it more affordable to increase the level of pollution abatement, thus likely increasing the optimal amount.

Answer:

1. B. false
2. A. true