Explain why economists consider it to be one of the economic functions of government to provide a legal system
What will be an ideal response?
A market economy relies heavily on contracts and property rights. Property rights must be defined and protected if people are going to make investments in resources, and if people are going to exchange assets. Contracts must also be enforced. By providing a legal system, the government can ensure that a market system will function better.
You might also like to view...
George is considering investing in a frozen yogurt store. If the store does well he will make $20,0000, but if the store does poorly he will make only $10,000. There is a 50 percent chance of each outcome
His utility of wealth schedule is in the above table. The expected utility of this investment is A) 115. B) 140. C) 165. D) 180.
The tax multiplier is smaller than the income multiplier
Indicate whether the statement is true or false
The law of demand states that
A) consumers with more income will spend more on goods and services. B) a higher price will lead to increased sales. C) the price can never be too high for some consumers. D) quantity demanded of a good will vary inversely with the price of that good.
Refer to the information provided in Figure 10.3 below to answer the question(s) that follow. 
Figure 10.3 Refer to Figure 10.3. The market wage is initially W1 and the firm is initially at Point B. Labor supply increases from S1 to S0. If the firm does not change the amount of capital it employs, the firm will move to Point ________ to maximize profits.
A. A B. C C. E D. F