When Property Rights Are Clearly Defined and Enforced, Private Owners

question 19

Multiple Choice

When property rights are clearly defined and enforced, private owners will

• A) use their property for selfish ends because they have little or no incentive to consider the desires of others.
• B) develop and direct their property toward uses that others value highly because the market will generally reward them for doing so.
• C) have little or no incentive to take care of their property or conserve it for the future.
• D) be unable to derive personal gain if they are sensitive to the desires of others when deciding how to use their property.

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Definitions:

Carrying Costs

Expenses associated with holding inventory, including storage, insurance, and spoilage costs.

Shortage Costs

Costs incurred by a business when the demand for its products exceeds its supply, often leading to lost sales and customer dissatisfaction.

Short-term Financial Policy

Guidelines or strategies focused on managing a company's current assets and liabilities to ensure short-term operational needs are met.

Carrying Costs

Expenses associated with holding inventory, including storage, insurance, and opportunity cost of tied-up capital.