The Coase Theorem States That

Multiple Choice

The Coase Theorem states that:

A) government should levy excise taxes on firms which generate spillover or external costs.
B) taxes should be levied such that they change private behavior as little as possible.
C) under the right conditions, bargaining between private parties will remedy externality problems without the need for government intervention.
D) trading of votes to secure favorable voting outcomes may increase efficiency.