If property rights are not clearly defined and enforced, then
A) incentives for specialization based on comparative advantage are weakened.
B) some potential gains from specialization and trade are lost.
C) resources are devoted to protecting possessions rather than to production.
D) All of the above answers are correct.

Question

Quizplus · Accepted Answer

When property rights are not clearly defined and enforced, it leads to weakened incentives for specialization based on comparative advantage, loss of potential gains from specialization and trade, and resources being devoted to protecting possessions rather than to production. All these factors contribute to less efficient economic outcomes.

If Property Rights Are Not Clearly Defined and Enforced, Then