Which of the following economic theorems states that under perfect competition, if property rights are well-defined and transaction costs are zero, private and social costs can be aligned without government intervention?

💡 Solution & Explanation

Formulated by economist Ronald Coase, the Coase Theorem demonstrates that well-defined property rights and zero transaction costs allow private economic agents to negotiate efficient solutions to externalities without state intervention. Alternative theorems like Heckscher-Ohlin analyze international trade patterns based on factor endowments.