When private property rights are established,the expected payoffs from investment will ________ and the amount of production will ________.
A) increase; increase
B) decrease; decrease
C) increase; decrease
D) decrease; increase
E) increase; remain unchanged

Question

Quizplus · Accepted Answer

When private property rights are established, individuals are able to reap the full benefits of their investments and thus have a greater incentive to invest. This leads to an increase in expected payoffs from investment. As a result, individuals are more likely to invest in production, leading to an increase in the amount of production.

When Private Property Rights Are Established,the Expected Payoffs from Investment