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So we're here to talk about government intervention.
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The first thing we're going to talk about is property rights.
00:06
So when we're talking about property rights with respect to economics, the reason we're interested in it is because that property rights ensures a sense of security in terms of transactions.
00:19
So if i am a store owner and i get robbed or something, i know that the government can find this thief and make them pay for whatever i lose.
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Or there is some sort of government intervention that offers me that security.
00:33
And because of this, it allows for the continuation of i still have an incentive to buy or sell things because i know i can still reap the benefit of whatever i want to buy or whatever i want to sell.
00:47
Okay.
00:49
So choice a in our question is right.
00:52
The next thing we're going to talk about is externalities.
00:55
Okay.
00:55
So what exactly is an externality? an externality is when one person's actions impact.
01:00
Another person's well -being and that other person who is being impacted has no compensation.
01:07
So what happens is the market doesn't take into account all the costs and benefits of a situation...