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Questions › UGC-NET › UGC-NET 2026 › Q51
2 marksMicroeconomics › Market failure, externalities and public goods › Coase theorem and property rightsModerateabout 1 min

UGC-NET 2026 Question 51: Market failure, externalities and public goods

Key assumptions of Coase theorem are:
A. Zero transaction coast and two agents to each bargain
B. Competitive market for legal entitlements and perfect knowledge about utility function
C. Profit Maximizing produces and expected utility maximizing consumers
D. No wealth effects

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Market failure, externalities and public goods has come up 114 times in 7 exams since 2006.

What this question tests

This question is on Coase theorem and property rights, part of Market failure, externalities and public goods in Microeconomics.

How bargaining can fix an externality when property rights are clear and costs of bargaining are low.

TestStop has 15 past-paper questions on this subtopic.

Take this paper as a timed mockMore on Coase theorem and property rights

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Question from the UGC-NET 2026 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.