Question

For each of the following situations, is the Coase Theorem applicable? Why or why not?
a. A farmer who grows organic corn is at risk of having his crop contaminated by genetically modified corn grown by his neighbors.
b. In Silveiras, Brazil, queen ants are regarded as a delicacy, but recently the ant haul has been dwindling because of pesticides used on eucalyptus trees that are planted to pro-duce cellulose for paper and other products [Barrionuevo and Domit, 2011].
c. Following a military coup in Madagascar, a weak president was installed who was un-able to stop the selling of Rosewood trees to China that were illegally cut down from the national parks. d. Users of the Internet generally incur a zero incremental cost for transmitting information. As a consequence, congestion occurs, and users are frustrated by delays.


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  • CreatedMarch 25, 2015
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