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What did Coase suggest could overcome externalities if not for transaction costs?
Government Regulation
Well-Defined Property Rights
Social Welfare Programs
Monetary Policy
Answer
Well-defined property rights can resolve externalities when transaction costs are prohibitive. They clarify ownership and entitlements, enabling the negotiation and exchange of rights between affected parties. By establishing a framework for bargaining and compensation, property rights provide incentives to reach efficient outcomes and mitigate the negative impacts of externalities.
Coase's Economic Conundrums: Unraveling the Legacy of a Nobel Laureate
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Coase received his education at which institution?
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Which industry did Coase use as an example in his study of transaction costs?
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