Final answer:
Property rights play a significant role in achieving efficiency. When property rights are well-defined and protected, individuals and firms have the incentive to invest in and improve their property, leading to increased productivity and economic growth.
Step-by-step explanation:
Property rights play a significant role in achieving efficiency. When property rights are well-defined and protected, individuals and firms have the incentive to invest in and improve their property, leading to increased productivity and economic growth. For example, if a farmer owns a land and knows that they will reap the full benefits of their labor, they are more likely to invest in better farming techniques and equipment, ultimately increasing their yield and efficiency.
On the other hand, when property rights are weak or insecure, it can lead to inefficiency. Without clear ownership and control over resources, it becomes difficult to allocate resources effectively. In the case of the village of Sturbridge, if the boat tour company does not have clear property rights over the lake, it may lead to conflicts and inefficiencies in its operation, hindering its ability to provide quality services to visitors.
In summary, well-defined and protected property rights are essential for achieving efficiency in economic activities. They provide individuals and firms with the necessary incentives to invest and improve their property, leading to increased productivity and economic growth.