Alex loves playing rock 'n' roll music at high volume. Clancy loves opera and hates rock 'n' roll. Unfortunately, they are next-door neighbors in an apartment building with paper-thin walls. In this case, imposes a externality on his neighbor in the form of noise pollution. Why might a command-and-control policy that forbids music to be played above a certain decibel level lead to an inefficient outcome? An efficient outcome can be achieved only if everyone can do what they love. Alex playing his music loudly does not do any harm if Clancy is not home. It is unfair because such policy would restrict Alex's activity but not Clancy's. Suppose the landlord lets the tenants do whatever they want. True or False: According to the Coase theorem, Alex and Clancy might not be able to reach an agreement if the transaction costs are high. True False