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A lighthouse warns ships about rocks.b.My building blocks your sunlight.c.You outbid me at the auction.d.Bees pollinate your apple trees.e.Noise lowers the sale value of my house.Questions 5.31–5.36(Questions on Boomer v. Atlantic Cement) pp. 170–172QUESTION5.31:Is the externality inBoomerprivate or public?QUESTION5.32:Are the transaction costs of bargaining among the parties low or high?QUESTION5.33:Suppose the households had a right to enjoin the cement company to stop polluting.What obstacles would the cement company face if it tried to purchase the right to pollute from thehouseholds?QUESTION5.34:Explain the remedy given by the court. Suppose that at some time in the future thecement company doubles its rate of output, thus increasing the noise, smoke, dust, and vibrationinflicted on the neighbors. Do the homeowners have a remedy?QUESTION5.35:Contrast the difference between temporary and permanent damages on the incentivesof people to build new houses near the cement factory.QUESTION5.36:To what extent can the private law of property solve the problem of pollution?Question 5.39(Expropriation)p. 177QUESTION5.39:What if the government needs to purchase a single, large piece of property in order toprovide a public good, say, a satellite-tracking station? There is only one private owner with whom todeal. And his property is the only one that is suitable for the station. Should the government beallowed to compel this individual, a monopolist for the contemplated public use, to sell at fair marketvalue?Question 5.41(Types of Expropriation)p. 178QUESTION5.41:Compare the efficiency of the following two methods of amending the just-compensation constraint:a.Define just compensation to be fair market value (including relocation costs) plus, say, 20 percent.b.Allow private property owners to make their own assessments of the value of their property.Property owners agree to pay property taxes on that self-assessed value. If the government ever takesthe property, it agrees to pay the self-assessed property value as just compensation.
Question 5.44(Public Property Insurance)p. 184QUESTION5.44:The Federal Government provides disaster insurance that helps people to buildvacation homes in places subject to flooding, such as sand dunes. Assume the government wants toprotect the environment by preventing construction of homes on a specific sand dune near the ocean.If the government takes private property on the sand dune, either by condemning it or by imposingregulations that forbid any construction, should compensation include or exclude the increase in thevalue of the land caused by government flood insurance?
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Economics, Public Property Insurance, norma5ve coase