A. Enforcement of Property Rights 1. Property rights give individuals the power to use, sell, rent, dispose of, or enhance the value of the resources they own 2. Government defines and protects them. Protected rights encourage the economically efficient use of resources.
Government is sometimes on the other side.
Eminent domain gives the government the ability to assume ownership of private property if compensation is made to the original owners. B. Externalities 1. They can be negative or positive. C. Provision of Public Goods 1. They are nonexcludable and nonrivalrous.