Why might someone expect the economist

Assignment Help Other Subject

Reference no: EM133579225

A lawyer and an economist are neighbors. During a storm, a large branch from a tree on the lawyer's property breaks off, causing damage to the economist's fence (which separates the two properties) and the economist's garage roof. Although the fence belongs to the economist, both neighbors benefit from the presence of the fence, albeit to different degrees (explained below).

After seeing the fallen tree and the damage to his fence and garage, the economist calls the lawyer to let her know that her tree damaged his property. The lawyer (correctly) points out that, under Rhode Island law, the lawyer is not responsible for the damage that her tree caused to the economist's property.

Here are some other relevant details:

The economist has the option of filing an insurance claim. The economist's insurance deductible is $2500, which means that the economist will have to pay $2500 if he files a claim to get the insurance company to pay for the damage.
The cost of the fence repair is $1500, and the cost of the garage roof repair is $500. So, since these costs are less than the insurance deductible, going through insurance is not an option.
The damage is to the top of the fence, so it poses no security risk and does not erode the integrity of the boundary between the two property lines.
The damaged part of the fence is blocked by small trees on the economist's side and is barely visible. The damaged fence therefore has no impact on the economist's quality of life.
The damaged part of the fence is fully visible in the lawyer's yard, and serves as a backdrop for a carefully manicured flower garden.

Respond to the following questions and carefully describe your reasoning for each one:

What will happen in a world with 0 transaction costs?
What do you see as the important sources of transaction costs in this example?
Why might someone expect the economist to be the one to pay for the fence in the real world? Why might someone expect the lawyer to be the one to pay for the fence in the real world? Who do you think will pay for the fence in the real world?
Who should pay for the fence?

Reference no: EM133579225

Questions Cloud

Image and likeness of college athletes : Focusing on the appropriation defenses, in what ways can companies likely use and likely not use the name, image and likeness of college athletes

Discuss your overall impression of primal leadership : Discuss your overall impression of Primal Leadership, including what were your three biggest takeaways.. Discuss what you will do to actively cultivate

Describe chain of custody and detail its importance : Describe Chain of Custody and detail its importance in the Criminal Justice process

Discuss any intentional torts or crimes that clyde barrow : discuss any intentional torts or crimes that Clyde Barrow could be charged with in this case, and please limit your response only to torts that were covered

Why might someone expect the economist : Why might someone expect the economist to be the one to pay for the fence in the real world? Why might someone expect the lawyer to be the one to pay

What was the underlying cause of this hospitals-acquired : What was the underlying cause of this hospitals-acquired outbreak of disease? How could it have been prevented? How can the surveillance system currently

Reading the salem witchcraft trial proceedings : Reading the Salem witchcraft trial proceedings and the theoretical works about witchcraft which provide background to those trials.

What are the elements that make a contract valid : What are the elements that make a contract valid and what are some examples of different types of contacts that are commonly used in the sports industry

How do you se this industry evolving and why : how do you se this industry evolving and why? you should answer this from the perspective of RyanAir, the competitive response, and the subsequent action which

User Account

All Pages