Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 2 - The Market System and the Circular Flow - Questions: 3

Answer

Private property is important to the market system because it enables individuals and businesses to use property resources as they see fit. Furthermore, property rights encourage cooperation by ensuring that business deals are mutually agreed upon by both parties.

Work Step by Step

Private property and the use of property resources guarantees the person who owns the property the ability to use it as they see fit and to pass on the property as they see fit. The cooperation necessary for these transactions also ensures that the strong cannot simply take from the weak. Both parties must agree on what is being traded for what.
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