Coase Theorem Definition
Coase theorem is the idea that under certain conditions, the issuing of property rights can solve negative externalities. For example, when a farmer…
Economic Systems
Economic System Definition
An economic system is a network that forms the economic relationships between individuals in society. In other words, how the people of a nation come together to create a complex whole and conduct economic transactions with each other.
The Importance of Property Rights
An efficient free market is reliant on strong property rights as a fish is to water. Its purpose is to ensure that competitive control over economic resources is resolved in a peaceful way. Rather than disputes leading to violence, they can be resolved through the legal system.
Incentives Definition
In economics, incentives are what encourages an individual to act in a certain way. In other words, how consumers and businesses respond to market signals such as prices and financial benefits.
