6.1 Social Systems

Question 1

what does scarce mean?

Answer 1

A good is scarce when you give up something in order to get it.

Question 2

What are social systems?

Answer 2

Refers to the process of how conflicts that arise due to scarcity are resolved.

Question 3

what are private property rights?

Answer 3

Refers to the entitlement’s an owner has; priviledges and limitations for the use of a resource. They are also excludable and transferable.

Question 4

define excludability

Answer 4

When owners decide how they use or do not use a good.

Question 5

pecuniary externalities

Answer 5

“a value-in-exchange effect”

when two parties exchange decisions, people outside this decision are affected by the price

Question 6

Alchain: Property Rights

Answer 6

Property rights are excludable and transferable, but offer no protection from pecuniary externalities and psychological or emotional effects.

Property rights are defined by the government and backed by political force. Voluntary enforcement by individuals.

Question 7

pareto improvement

Answer 7

when one party is better off and no one else is worse off