Question

question 6 (consider this) the principle that private negotiation can resolve potential externalities without resorting to government intervention is known as the coase theorem. false true question 7 1 pts where there is asymmetric information between buyers and sellers, markets can produce inefficient outcomes. product shortages will occur at the equilibrium price. markets will fail due to the over - allocation of resources. product surpluses will occur at the equilibrium price.

Explanation:

Question 6

The Coase theorem states that if property rights are well - defined and transaction costs are low, private parties can negotiate to an efficient outcome regarding externalities without government intervention.

Asymmetric information (one party has more information than the other) can lead to market inefficiencies. For example, in the market for used cars (the lemons problem), sellers know more about the quality of the car than buyers. This can lead to a situation where only low - quality cars are sold (or a misallocation of resources in a broader sense), which is an inefficient outcome. Product shortages or surpluses at equilibrium price are more related to price controls (like price ceilings or floors). Over - allocation of resources due to market failure in the context of asymmetric information is not the most direct result; rather, it is the inefficiency in the sense that the market does not achieve the optimal quantity and quality mix.

Answer:

true

Question 7