Well-defined property rights give entrepreneurs the incentive to
A) engage in risky business endeavors in order to accumulate future wealth.
B) use the eminent domain laws to seize property for public use.
C) lobby Congress in order to increase environmental regulations.
D) evade taxes.

Question

Quizplus · Accepted Answer

Well-defined property rights provide entrepreneurs with the assurance that the fruits of their labor will not be expropriated or taken away arbitrarily. Therefore, entrepreneurs are more likely to take risks and invest in new businesses or technologies because they know that they will reap the benefits if they succeed. This, in turn, promotes economic growth and innovation. Option B is not relevant to the incentives of entrepreneurs. Option C and D are not incentives for entrepreneurs, but rather the opposite.

Well-Defined Property Rights Give Entrepreneurs the Incentive to