Question 2c:  In what situations is the application of the Coase Theorem unable to achieve social efficiency? (3 marks)

Question 1c:  Explain the Political Economy Theories of regulation (5 marks).

What is the fundamental difference between market capitalism and managerial capitalism?

In firms and bureaucracies influenced by Confucian heritage, decision making is achieved through:

The “agency problem” is a concept arising from the corporate form. What primarily causes this problem?

Question 2a:  Explain the Coase Theorem (8 marks).

Which of the following is/are the principal roles of the WTO? (i)  Provides a system of agreements that helps trade move more freely  (ii) Provides a forum for trade negotiations (iii) Provides a dispute settlement mechanism to resolve trade disputes promptly  

The reliance on private ownership and markets leaves some issues unresolved. Which of the following is cited as a reason for businesses to address societal needs?   (i) Market imperfections can cause a divergence between private and social costs.  (ii) Government systems are flawless, so businesses must assist them in execution.  (iii) Business has an affirmative duty to address societal needs that are left unfulfilled by government.   

Question 4b: Who bears the cost of protectionism? (2 marks) Why? (3 marks)

The appropriability of returns from an intellectual discovery depends primarily on which factors?   (i) How easy it is for others to replicate the discovery.  (ii) The strength of the public protection for the discovery.  (iii) The specific damages awarded in a breach of contract.