In order for private bargaining to result in the efficient outcome,A) an injunction must be requestedB) property rights must be
clearly assigned to the parties involved in the dispute C) liability laws should not be present D) the right to impose an externality must be auctioned off to the highest bidder
The correct answer is letter "B": property rights must be clearly assigned to the parties involved in the dispute.
Explanation:
Named after British lawyer and economist Ronald Coase (<em>1910-2013</em>) the Coase Theorem states when there are competitive markets and no transaction costs bargaining will lead to an efficient and mutually beneficial outcome. The theorem affirms that when property rights are defined and divided, parties will gravitate to the most efficient and beneficial outcome.
Implicit cost refers to economic costs that are not directly attributed to the business but are nevertheless important in making informed decisions. In this case the opportunity costs are implicit cost. They are:
Salary forgone which should have been earned at another job, and
That is an explanation of which of fayol's principles of management: <span>Subordination of Individual Interest According to this principle, all the employees must put the company's priority over another, including conflict inside the working environment or personal conflicts outside the working environment </span>
Despite the fact that the architects, due to their experience, can provide alternatives based on factors such as location, size, type of house, etc., the client's requirements play a very important role since, prior to this, they have designed in their minds what they would like to have. in your new house. The architects serve as support to give a professional touch to the property, but taking into account the requirements of the person it is possible to adjust certain aspects to offer the best possible experience when the construction is finished.
Diego has expected life of 6 month due to his liver disease. He wants to sell his life insurance policy to a company. If he sells the policy, when Diego dies the company will receive all the benefit and will be taxed at ordinary income tax rate. The proceeds are not tax free. In case if Diego sells the policy to his cousin, he will also be taxed on proceed. The tax will be ordinary income tax on the benefit from life insurance policy.
