You accidentally jump the curb and run over your neighbor's extensive garden gnome collection. Your neighbor sues you and you are required to pay $3,000 to replace the gnomes. This is an example of
A. a liability rule.
B. the free-rider problem.
C. the Coase theorem.
D. an injunction.
Answer: A
You might also like to view...
Smith' s construction of an 8-foot fence around his property will block his neighbor Johnson's scenic view. If Smith constructed a 6-foot fence, Johnson's view would not be blocked. If Johnson values his view at $1,000 and Smith values the extra 2 feet of fence at $500, then a possible resolution is that
a. Johnson makes a side payment to Smith of $750 not to build the fence so high. b. Johnson makes a side payment to Smith of less than $500 not to build the fence so high. c. Smith makes a side payment of $750 to Johnson to live with the fence. d. Smith makes a side payment of over $1000 to Johnson to live with the fence.
A Classical aggregate supply curve is
A) vertical. B) upward-sloping. C) horizontal. D) downward-sloping.
Unless you accept his 'final offer' your negotiation opponent threatens to scrap the whole deal:
a. His threat is more believable if both parties would be harmed by scrapping the deal b. His threat is more believable if he has invested resources that lower his return to other options c. His threat is more believable if he puts his threat 'in writing' d. His threat is more believable if he has balked at this course of action in the past
If there is an increase in income, which of the following is true?
a. The demand for complementary goods decreases. b. The demand for substitute goods decreases. c. The demand for normal goods decreases. d. The demand for normal goods increases. e. The supply for all goods decreases.