Compare a Property Rights System in Which People Are Allowed

question 56

Multiple Choice

Compare a property rights system in which people are allowed to keep one-third of the monetary rewards of their labor with a system in which they keep two-thirds.An economist would expect that more people to decide to go to work under the __________ system and that many of those already working would decide to work more under the __________ system.

• A) former; former
• B) former; latter
• C) latter; former
• D) latter; latter

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Definitions:

Risk Preferences

Denote an individual's or entity's tolerance for risk, influencing decision-making in uncertain situations.

Expected Value

The calculated average of all possible outcomes of a random variable, weighted by their probabilities.

Risk Premium

The extra return above the risk-free rate demanded by investors for holding a risky asset.

Fire Insurance

A type of property insurance that covers damage and losses caused by fire, providing financial compensation to the insured.