What is the difference between pecuniary and nonpecuniary externalities?
What is the Pigouvian approach to handling external costs?
According to Friedman, what are the three ways that Coase felt Pigou's
analysis was wrong?
Would Coase argue that the Pigouvian remedy for external costs is always
wrong? If so, why? If not, when would it not be wrong?
According to Coase, who is responsible for external costs?
Do externalities always cause inefficiency? Why or why not?
What passage from "The Problem of Social Cost" do you think
comes closest to what has since become known as the Coase theorem? How would you state the
Coase theorem?
What are some examples that Coase cites to illustrate his focus on
"how we bundle property rights"?
Decide whether you agree or disagree with the following assertion: when
the conditions of the Coase theorem are met, the final allocation of resources is
efficient (the efficiency hypothesis) and invariant (the invariance hypothesis) under
alternative assignments of property rights.
Assess the following statement by economist Cento G. Veljanovski:
"[I]n the ideal market setting law can pursue non-economic objectives without any
sacrifice of economic efficiency."
What are some examples of transactions costs?
According to Coase, how should the "legal system" respond to a
world in which transactions costs exist?
What "particular example" did Pigou choose to illustrate the
issue of compensation for external costs? Why did Coase consider the choice
"strange"?
What policy options does Coase consider for dealing with externalities?
Consider how you would summarize and assess the Coase article, "The Problem of Social Cost."