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midterm1_study - • What is externality What does...

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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...

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