Asked by Yusuf Gazali on May 10, 2024
Verified
Well-defined property rights:
A) can allow for mutually beneficial trades.
B) will result in government regulation.
C) often result in more market failures.
D) lead to more centralized decision making.
Well-Defined Property Rights
Legal parameters that establish ownership and delineate the use of resources or assets.
Mutually Beneficial Trades
Transactions between parties that improve the welfare of each participant.
- Understand the significance of clearly established property rights in enabling market exchanges.
Verified Answer
SM
Sahil MeangiMay 17, 2024
Final Answer :
A
Explanation :
Well-defined property rights allow individuals to have clear ownership over resources and assets, which in turn allows for mutually beneficial trades and transactions to occur. This can lead to increased efficiency and productivity in a market economy. Government regulation may still be necessary to protect property rights and ensure fair competition, but well-defined property rights do not automatically result in more government intervention. Market failures can occur regardless of property rights, but clear ownership can help mitigate some types of market failures such as the tragedy of the commons. Well-defined property rights also do not necessarily lead to more centralized decision making, as ownership can be held by individuals or decentralized groups.
Learning Objectives
- Understand the significance of clearly established property rights in enabling market exchanges.
Related questions
Suppose Purchases Do Not Occur Because the Value of the ...
When a Good Does Not Have a __________ Attached to ...
Markets May Fail to Allocate Resources Efficiently When Property Rights ...
Sophia Sits Behind Gabriel on an Airplane ...
Property Rights Are an Important Feature of an Effective Market ...