Economics 15th Edition by James Gwartney,Richard Stroup,Russell Sobel,David Macpherson

Question

Economics 15th Edition by James Gwartney,Richard Stroup,Russell Sobel,David Macpherson

النسخة 15الرقم المعياري الدولي: 978-1285453538

Economics 15th Edition by James Gwartney,Richard Stroup,Russell Sobel,David Macpherson

النسخة 15الرقم المعياري الدولي: 978-1285453538

تمرين 2

Chick-fil-A's "Eat Mor Chikin" advertising campaign features three cows holding signs that say things like "Save the cows, eat more chicken." If consumers began eating more chicken and less beef, would the cattle population increase or decrease? Explain.

التوضيح

موثّق

If consumers began eating more chicken and less beef then the population of cattle would decrease. In order to understand why the population of cattle would decrease even if people decline their consumption of beef we need to understand how the market principles and private property rights determine human behavior towards the asset possession. While private ownership right gives incentive to the owner to protect and preserve its asset in a manner valued by other the market demand for the asset determines the value of the asset (that is the market price).
When consumers willingly decide to eat less beef then the market demand for beef falls and the price of beef falls as well. Private owners of cattle accordingly start valuing less the cattle and prefer to preserve chickens instead as the demand for chicken increases thereby increasing the price. The owner of cattle now prefers to engage the resource in raising chicken instead of cattle. Hence the population of cattle falls.