LEGL - Ch. 1 - Answers to Review Questions

LEGL - Ch. 1 - Answers to Review Questions - Chapter 01 -...

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Chapter 01 - Law as the Foundation of Business ANSWERS TO REVIEW QUESTIONS AND PROBLEMS - CHAPTER 1 INTRODUCTION 1. Why Nations Are Prosperous or Poor (a) Answer should discuss dependency theory, natural resources, education, technology, the private market, and the legal system. (b) A “proper” legal system that is adequately enforced. LAW, THE RULE OF LAW, AND PROPERTY 2. Law (a) Law is a series of rules laid down by the state and backed up by enforcement. Both law and custom maintain order in society, but law is more formal and easier to change whereas custom usually precedes law. (b) The roles of enforcement, application, and interpretation. 3. The Rule of Law (a) A system of law defined by generally and equally applicable rules. The general and equal application of rules differentiates the rule of law from law as the commands of the state. (b) Because lawmakers are often susceptible to favoring special interests. 1-1
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Chapter 01 - Law as the Foundation of Business 4. Property (a) Either a “bundle of rights,” or a single right to exclude others from one’s resources. Property is a right. Resources are what people use to satisfy their wants or needs. (b) Property is the method the state uses to create the maximum incentive in society for the generation of resources. In heterogeneous modern nations, property is the specific legal foundation for private enterprise. (c) It means that, conceptually, property is a hub of our legal system and the other areas of the law radiate from it. 5. Property in its Broadest Sense (a) The right to exclude others from our resources and to keep them from infringing on what is ours pervades Western legal systems. If the right of property is at the hub of these legal systems, contract is that important spoke whose rules provide for the transfer of an owner’s resources, tort is that spoke which provides compensation for
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LEGL - Ch. 1 - Answers to Review Questions - Chapter 01 -...

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