1. Consider a situation where prices are determined via bargaining. What conditions must hold for the market to coordinate economic activity so that an efficient point is reached? Is government intervention justified on efficiency grounds in such a situation? On other grounds?
2. What must hold for the price mechanism to guide economic activity so that an efficient point is reached?
3. Define opportunism. Are the freight-haulers in Alchian-Demsetz opportunistic? Provide an example of an economic arrangement or institution would not exist absent opportunism. Be precise in describing exactly why this is the case.
4. Is it reasonable to apply the Coase Theorem toward analyzing firms in bankruptcy? Why or why not?