ECO320 Final Exam (2025) ACTUAL
EXAM COMPREHENSIVE
QUESTIONS AND VERIFIED
ACCURATE SOLUTION (DETAILED &
ELABORATED) |GET IT 100%
ACCURATE!! 2025 TEST!!
Save
Terms in this set (284)
- optimality in the economic analysis
"Central Problem" of law
- maximize social surplus
, - supplies the legal framework for
allocating resources & distributing
wealth
- a bundle of rights describing what
people may & may not do with the
resources they own: the extent to
which they may -->
Property
possess/use/develop/improve/transfo
Rights/Law
rm/consume/deplete/destroy/sell/do
nate/bequeath/transfer/mortgage/lea
se/loan/exclude
- economic theory tries to predict the
effects of alternative forms of
ownership, especially the effects on
efficiency & distribution
- the first party to use an unowned
resource acquires claim to it
- an example of maintaining low
transaction costs by defining property
rights clearly & simply
Rule of First
- cost minimizing as it focuses on just
Possession / Rule
a few simple facts
of Capture
- encourages efficiency by
emphasizing the production of wealth
over the transfer of wealth
- danger being that the rule may lead
to over-investment
, - may occur when the Rule of First
Rule of Tied
Possession can lead to economic
Ownership
costs
When transaction costs are zero, an
efficient (socially optimal) use of
Coase Theorem resources results from private
bargaining, regardless of the legal
assignment of property rights
*Low Transaction Costs --> injunction
is the more efficient remedy:
- right to an injunction gives the
parties a clearer position from which
to bargain, although parties may
Coase Theorem & eventually agree to a settlement
Damages vs. based on compensation
Injunction
*High Transaction Costs (to prevent
bargaining) --> switching from
injunction to damages makes the
injurer better off without making the
victim worse off
, - the farmer is responsible for keeping
the cattle off his property
- the farmer bears (must pay for) any
damages caused by the cattle
Open Range Rule - Rancher chooses optimal # of cattle
- Ranchers' Rights & optimize their own surplus
- Farmer has no legal recourse against
damages done by cattle
- Farmer must take precautions to
reduce the damage
- the rancher is responsible for
keeping the cattle on their property
- the farmer bears (must pay for) any
Closed Range
damages caused by the battle
Rule - Farmers'
- Rancher chooses to optimize total
Rights
social surplus
- Rancher must reduce damage to
Farmer
- fairness requires the party who
Fairness vs. causes harm to pay for it
Efficiency - efficiency requires allocating the
right to the party who values it most
EXAM COMPREHENSIVE
QUESTIONS AND VERIFIED
ACCURATE SOLUTION (DETAILED &
ELABORATED) |GET IT 100%
ACCURATE!! 2025 TEST!!
Save
Terms in this set (284)
- optimality in the economic analysis
"Central Problem" of law
- maximize social surplus
, - supplies the legal framework for
allocating resources & distributing
wealth
- a bundle of rights describing what
people may & may not do with the
resources they own: the extent to
which they may -->
Property
possess/use/develop/improve/transfo
Rights/Law
rm/consume/deplete/destroy/sell/do
nate/bequeath/transfer/mortgage/lea
se/loan/exclude
- economic theory tries to predict the
effects of alternative forms of
ownership, especially the effects on
efficiency & distribution
- the first party to use an unowned
resource acquires claim to it
- an example of maintaining low
transaction costs by defining property
rights clearly & simply
Rule of First
- cost minimizing as it focuses on just
Possession / Rule
a few simple facts
of Capture
- encourages efficiency by
emphasizing the production of wealth
over the transfer of wealth
- danger being that the rule may lead
to over-investment
, - may occur when the Rule of First
Rule of Tied
Possession can lead to economic
Ownership
costs
When transaction costs are zero, an
efficient (socially optimal) use of
Coase Theorem resources results from private
bargaining, regardless of the legal
assignment of property rights
*Low Transaction Costs --> injunction
is the more efficient remedy:
- right to an injunction gives the
parties a clearer position from which
to bargain, although parties may
Coase Theorem & eventually agree to a settlement
Damages vs. based on compensation
Injunction
*High Transaction Costs (to prevent
bargaining) --> switching from
injunction to damages makes the
injurer better off without making the
victim worse off
, - the farmer is responsible for keeping
the cattle off his property
- the farmer bears (must pay for) any
damages caused by the cattle
Open Range Rule - Rancher chooses optimal # of cattle
- Ranchers' Rights & optimize their own surplus
- Farmer has no legal recourse against
damages done by cattle
- Farmer must take precautions to
reduce the damage
- the rancher is responsible for
keeping the cattle on their property
- the farmer bears (must pay for) any
Closed Range
damages caused by the battle
Rule - Farmers'
- Rancher chooses to optimize total
Rights
social surplus
- Rancher must reduce damage to
Farmer
- fairness requires the party who
Fairness vs. causes harm to pay for it
Efficiency - efficiency requires allocating the
right to the party who values it most
