Markets can allocate resources efficiently only as long as _____
A)property rights are well defined and can be easily enforced.
B)property rights are well defined but not easily enforced.
C)property rights are not defined but can be easily enforced.
D)property rights are not defined and not easily enforced.
E)a nonrenewable resource has been used in the production of the good.

Question

Quizplus · Accepted Answer

Property rights being well defined and easily enforceable is essential for markets to allocate resources efficiently. Without this, there is a risk of externalities and market failures that can lead to inefficient allocation. Having defined and enforceable property rights ensures that individuals and firms can make decisions without fear of infringement or unwanted interference, which promotes the optimal use of resources.

Markets Can Allocate Resources Efficiently Only as Long as _____