midterm1_study - What is externality? What does negative...

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1 63 Main topics : Economic efficiency and other common economic & legal terms. Legal institutions and the common law system. Externality and its economic solutions Coase theorem and how to use Coase theorem Transaction cost Property rules vs. liability rules Note: the following only serves as a guide for your study. It is by no means a complete list of course material. You are responsible for everything that has been covered in class. 64 Outline 1. The economics approach • What is economic efficiency? What is Pareto efficiency? What is Hicks/Kaldor efficiency? • What is the main advantage of studying law from an economic approach? • What is a trade-off? Give an example of a trade-off a society faces in law enforcement. • What are the purposes of punishment? Why does economic analysis of law focus on deterrence?
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2 65 What is a transfer? Does transfer matter for efficiency? What is rent seeking behavior? Compare the civil law with the common law system.
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Unformatted text preview: What is externality? What does negative (positive) externality mean? Is it efficient to have negative or positive externality? Compare social cost with private cost when we have a negative externality problem. 66 Compare social benefit with private benefit when we have a positive externality problem. What is the Pigouvian solution to the externality problem? Discuss the economic solutions to the pollution problem. Coasian critique What is Coase theorem? Does the initial allocation of property right matter? Matter in what way? 3 67 What is transaction cost? Give some examples of transaction cost. What is a public good problem? What is a hold out problem? What is a property rule? What is a liability rule over something? What are the advantage of the property rule? What are the advantages of the liability rule? Which rule is more efficient? What are the advantages of damages? What are the advantages of fines?...
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midterm1_study - What is externality? What does negative...

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