When there is a building that is used for production, but no one has clear property rights to it

Question

Quizplus · Accepted Answer

When there is a building that is used for production, but no one has clear property rights to it, it leads to a situation called "dead capital." This causes inefficient production as the individuals or firms using the building have no incentives to invest in improving its productivity or maintaining it in good condition. Additionally, the lack of clear property rights can lead to conflicts, disputes, and uncertainty, which further discourage investment and productive activities in the building. Therefore, the best choice is D, which recognizes that dead capital causes inefficient production.

When There Is a Building That Is Used for Production