This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: How do government policies that enforce property rights affect economic growth? What will be an ... (Read 132 times)

jessicacav

  • Hero Member
  • *****
  • Posts: 558
on: Jun 29, 2018
How do government policies that enforce property rights affect economic growth?
 
  What will be an ideal response?

Question 2

The Whatsa Widget Company produces widgets in a perfectly competitive market. The price of a widget is 9 . Whatsa is currently producing at a rate where the marginal cost of production is 15 .
 
  Is this company maximizing profit at its current level of output? Explain.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

mistyjohnson

  • Sr. Member
  • ****
  • Posts: 331
Reply #1 on: Jun 29, 2018
Answer to Question 1

Without enforceable property rights, entrepreneurs lose the incentive to take on risk because they are not assured ownership of their resources. Economic growth suffers as a result. Failure to protect intellectual property rights has a similar impact. If the benefits of technological advances are shared with all firms, each individual firm has little incentive to invest in the costly research and development necessary for technological progress to continue.

Answer to Question 2

No, the company is not maximizing profit because marginal revenue is not equal to cost. In fact, the cost of the last unit produced (15) is greater than the revenue that the firm gained from its sale. Thus, the firm lost money on the last unit sold. To maximize profits, the firm needs to lower its level of output.


jessicacav

  • Member
  • Posts: 558
Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it

juliaf

  • Member
  • Posts: 344
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

More than 50% of American adults have oral herpes, which is commonly known as "cold sores" or "fever blisters." The herpes virus can be active on the skin surface without showing any signs or causing any symptoms.

Did you know?

A strange skin disease referred to as Morgellons has occurred in the southern United States and in California. Symptoms include slowly healing sores, joint pain, persistent fatigue, and a sensation of things crawling through the skin. Another symptom is strange-looking, threadlike extrusions coming out of the skin.

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

The first oral chemotherapy drug for colon cancer was approved by FDA in 2001.

Did you know?

In women, pharmacodynamic differences include increased sensitivity to (and increased effectiveness of) beta-blockers, opioids, selective serotonin reuptake inhibitors, and typical antipsychotics.

growth of bacteria growth of bacteria
In 2008, the U.S. economy suffered a gaping wound as several trillion dollars were ripped out of it. In 2008, the U.S. economy suffered a gaping wound as several trillion dollars were ripped out of it.
Mechanisms of action of antiepileptic drugs that affect GABA. Mechanisms of action of antiepileptic drugs that affect GABA.
Limiting factors restrain population growth Limiting factors restrain population growth
Ice cores also preserve a record of ice sheet growth and decay Ice cores also preserve a record of ice sheet growth and decay
economic question economic question
Video: Digestive chemicals - types & enzymes

For a complete list of videos, visit our video library