Question

Loggers are much_______- likely to supply wood to the market if property rights are not enforced.In the presence Of market failures, public policy can improve economic efficiency. Classify the source of market failure in each case listed. A person smoking in a restaurant emits second-hand smoke that harms other restaurant patrons.a. Market Power b. Externality A single grocery store is the only source of food in a small town, giving the store the ability to influence the price of food. a. Market Power b. Externality

Answer 1

Answer:

less;

A person smoking in a restaurant emits second-hand smoke that harms other restaurant patrons. b. Externality

A single grocery store is the only source of food in a small town, giving the store the ability to influence the price of food.  a. Market power

Explanation:

Property rights are usually imposed on individuals who are able to control the resources which are of public value. When the society gets affected by the practices of those individuals or entities, property rights made by a government or regulatory body come into the picture. Therefore, those individuals need to be regulated and incentivized by property rights, or they will be less likely to conform to the market needs.

These rights protect the market from market failures, which is their main purpose.  

The most common types of market failures include externalities and market power. The first example is an externality as the unwanted smoke represents the cost (or benefit) which cannot be influenced by a specific party.

The other example is typical market power, as the monopolist (grocery store) can control the price of goods, which is an essential market determinant.