Reference no: EM132186170

Law and Economics Assignment -

Instructions: Briefly review and respond to the questions below.

Chapter 1 Questions -

1. The Invisible Hand Theorem says that markets will achieve an efficient allocation of resources under certain conditions. What are those conditions, and how does the law correct for their absence? Is market efficiency the only objective of laws?

2. Describe the difference between positive and normative analysis and give an example of each.

Chapter 2 Questions -

3. A rule of strict liability clearly dominates a rule of no liability in the unilateral care accident setting, but either may be preferred in a bilateral care accident setting. Explain why.

4. One measure of damages for an accidental loss is medical expenses. Do these costs necessarily restore the injured person to the pre-accident state? Why might damages for "pain and suffering" be justified as part of full, compensatory damages?

Chapter 3 Questions -

5. Discuss the advantages and disadvantages of having a workers' compensation-type system for medical malpractice claims.

6. Most people have insurance for losses sustained by accidents, whether property or personal injury. They also often have insurance for liability resulting from injuries they cause to others. Discuss the impact of insurance on the operation of the tort system, particularly as it affects incentives for precaution by injurers and victims.

Chapter 4 Questions -

7. Discuss the contract doctrine of unconscionability. What are its advantages and disadvantages from an economic perspective?

8. Define the concept of "consideration" and explain its economic function. Does it make sense that courts do not typically examine its adequacy as a basis for an enforceable contract?

Chapter 5 Questions -

9. Suppose Moe agrees to sell a house to Larry for $100,000. The value of the house to Larry is $110,000, and the value to Moe is $90,000. After they have agreed to the sale, Curly shows up and offers $120,000 for the house. Moe accepts and sells to Curly. Was there a contract between Moe and Larry? If so, was the breach efficient? In the event of a breach, what would Larry's expectation damages be? Analyze the case if the court invokes specific performance and orders Moe to sell to Larry.

10. When a tenant vacates an apartment prematurely (i.e., before the expiration of the lease), the landlord can sue for foregone rent. However, he or she also has a duty to mitigate the damages. In what way can the landlord mitigate the damages from breach of the lease? Why is it efficient for him or her to do that?

Textbook - The ECONOMIC APPROACH to LAW, Third Edition by Thomas J. Miceli.