Question

Property rights are a crucial part of a functioning market economy and economic growth. Consider the difference between cows and endangered species of animals. How do property rights prevent cows from becoming extinct? If it were legal to buy and sell endangered species, would it help them recover? Why or why not? How do property rights help to allocate resources to their best uses?

Answer 1

Ans? Question ÷ Why cow is numerous in number, though they are killed in large number for beef whereas other animals like elephants are on verge of becoming extinct because they are being killed for ivory?

Ans÷ The one line answer for this is that other animals like elephants are common resources whereas cows are private resources.

People find little incentive in maintaining common resources because the benefit gained is comparatively less when compared to the cost. But maintaining private property reaps more benefit.

Elephants(or other species) are common resources and roam freely, poachers have strong incentive to kill as many as they can. But since poachers are many, they have little incentive to preserve them. Cows on other hand live in ranchers are maintained privately and each rancher works hard to preserve them as they (only single individual) reaps benefit of it.

So yes, if other species were made legal to buy and sell, it might have prevented them from going extinct. And would have recovered their number as people would have had incentive in maintaining their species.

Conclusion ÷ we see that resources which are common to everyone's use are less maintained because people rely on government to maintain them. Lack of properly defined property rights lead to market failure. Property rights allocate resources to those who value it most and hence those resources are used at their best.