When Private Ownership of a Resource Is Clearly Defined and Enforced

question 26

Multiple Choice

When private ownership of a resource is clearly defined and enforced, the private owner

• A) has little incentive to consider the wishes of others when deciding how to employ the resource.
• B) has little incentive to use the resource wisely.
• C) has a strong incentive to consume the resource during the period rather than conserving it for the future.
• D) has a strong incentive to use the resource wisely.

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Definitions:

Third-Party

An entity that is involved in a transaction or legal matter indirectly, separate from the two principal parties directly involved.

Promise

An assurance given by one party to another agreeing to do or not do something in the future.

Insolvent

Refers to the condition of an individual or entity that cannot pay its debts when they are due.

Serve Process

The procedure by which a party to a lawsuit gives an appropriate notice of initial legal action to another party (defendant or respondent) in order to exercise jurisdiction over that person.