Question

Why is it important for governments to protect property rights in a free enterprise system? A)Government is the only mechanism that protects property rights. B)Failing to do so could cause markets to break down as well as introduce a high degree of inefficiency. C)Governments are not particularly good at protecting property rights. D)Governments gain the property rights when an owner dies, and that wealth is distributed to the governments' citizens.

Answer 1

Answer:

B)Failing to do so could cause markets to break down as well as introduce a high degree of inefficiency.

Explanation:

Property rights are defined as the socially-enforced laws in economics that determine how resources or economic goods should be used.

Property rights are very important in a free enterprise system to maintain economic balance and remove any destructive competition in the market that can affect the economy. if the government will fail to protect property rights in a free enterprise system, it can cause markets to break down as well as introduce a high degree of inefficiency as there will be no healthy competition and consumer sovereignty.

Hence, the correct answer is "B)Failing to do so could cause markets to break down as well as introduce a high degree of inefficiency."