Question

Which of the following best explains why property rights are necessary in a

free-market system?
A. Property rights allow consumers and producers to make free
choices.
B. The government cannot plan an efficient economy without
passing laws
C. Competition cannot exist if some own property and others do not.
D. Market forces only work when everyone owns some property.

Answer 1

Property rights are necessary in a free-market system because they allow for free choices, ensure competition, and enable market forces to work effectively.

Step-by-step explanation:

Property rights are necessary in a free-market system for several reasons. First, property rights allow consumers and producers to make free choices (A). Individuals and firms have the right to own and use property as they see fit. This means that consumers can decide what products to buy and producers can decide what to produce and how to produce it. Second, property rights ensure competition in the market (C). If some own property and others do not, there would be an imbalance of power and competition would be hindered. Lastly, property rights are essential for market forces to work effectively (D). When individuals and firms own property, they have the incentive to use it for their benefit, leading to increased efficiency and economic growth.