Property rights and the role of prices as economic signals are two features that make markets function effectively.

Question

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Property rights allow individuals to have ownership and control over their resources, which incentivizes them to use those resources in productive ways. Prices serve as signals of the scarcity of goods and services, encouraging producers to allocate resources efficiently and consumers to make rational choices about their purchases. Together, these features promote efficient market outcomes.

Property Rights and the Role of Prices as Economic Signals