Which of the Following Statements Is True

Multiple Choice

Which of the following statements is true?

A) The lower transaction costs are, the more likely individuals will solve negative externality problems through a voluntary exchange.
B) The higher transaction costs are, the more likely individuals will solve negative externality problems through a voluntary exchange.
C) Coase agrees with Pigou that taxing those activities associated with negative externalities is a good idea.
D) Coase agrees with Pigou that taxing those activities associated with positive externalities is a good idea.