PS5 - investment 4 Assume that the farm operated for...

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Legal Studies 145 - Law and Economics I P ROBLEM S ET #5 Jets from an Air Force base fly their daily practice missions less than 100 feet above a chicken farm. As a result of the disturbance the chickens lay 50% fewer eggs, and the farmer's profits fall by 50% as well. The farmer then sues the U.S. Government, arguing that the loss of profit resulting from the plane flights constitutes a taking. Answer the following questions, supplying any additional facts that you might need. 1. In your view, is there a "physical invasion" by the government? 2. Would the lost profits of the chicken farm necessarily lead to a substantial diminution in the value of the farmer's land? 3. If the land is indeed less valuable because of the jet flights, does this mean that they interfere with the farmer's expectation that she will earn a reasonable return on her
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Unformatted text preview: investment? 4. Assume that the farm operated for decades before the overflights began. Do you believe that there is a regulatory taking requiring compensation of the farmer? Why or why not? 5. Would your answer to #4 change if you were told that the farmer bought her land some time after the Air Force began their practice missions? From an economic perspective, why might we prefer a rule that denied compensation in cases like this? 6. Compensation for takings is similar to the use of a damage remedy when there are nuisances involving private parties. From an economic perspective, do you think that giving the right to the farmer to get an injunction against the government would be more or less efficient than a damage remedy? Explain....
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