The "rules of the game, " the set of conditions that shape individual incentives and constraints, are determined by
A)the production possibilities frontier
B)scarcity
C)technology
D)the amount of consumer goods in the economy
E)laws about resource ownership and the role of government

Question

Quizplus · Accepted Answer

Laws about resource ownership and the role of government shape the institutional framework that sets the rules of the game. These rules define property rights, contract enforcement, and the role of government in regulating economic activity. The institutional framework determines the incentives and constraints that individuals face and therefore shapes economic behavior and outcomes.

The "Rules of the Game, " the Set of Conditions