ECO 320H1F - LEC 0201

pdf

School

University of Toronto *

*We aren’t endorsed by this school

Course

320

Subject

Economics

Date

Apr 3, 2024

Type

pdf

Pages

10

Uploaded by Alimin48

Report
LAST NAME: FIRST NAME: STUDENT ID# Midterm Test Thursday, September 28, 2023 2:10PM to 4PM ECO 320H1F – LEC0201 - An Economic Analysis of Law Department of Economics University of Toronto INSTRUCTIONS: All questions must be answered on this Test paper in the space provided. Full marks will only be awarded to fully explained answers accompanied by a fully labelled diagram or diagrams where appropriate. Please read all questions carefully before answering them. TIME: One Hour (1) and Fifty (50) Minutes AIDS: No aids except a non-programmable calculator are allowed Please turn over to Page 2
Page 2 (20 Marks) QUESTION 1: At the present time, Toronto zoning regulation segregates commercial leases from residential leases. Commercial landlords are not allowed to lease space to residential tenants. Experts predict commercial vacancy rates could exceed 20% for the long run due to “work from home” arrangements. Carefully explain, using economic analysis, how a zoning change could solve both the vacancy rate problem and the apartment shortage problem. Please turn over to Page 3
Page 3 (20 Marks) QUESTION 2: Explain the difference between compensation and injunction as property rights remedies using economic analysis. In your answer, include an explanation on how the remedy can affect the “ value ” of the property right? o Please turn over to Page 4
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Page 4 QUESTION 3: (20 Marks) A steel mill, S, competes in a perfectly competitive international market. S produces 8 tons of steel hourly. The market price = $80 a ton. For every ton of production, S produces 0.4 tons of pollution. The private cost of production is $5x 2 and the private marginal cost of production = $10x (where x is steel output of S measured in tons). The downstream village of Watertown (WT) spends $15 per ton to eliminate the pollution from S. (a) (10 marks) WT wants to bargain with S to reach an optimal agreement on this pollution. Assuming S is still not legally liable for its pollution and both S and WT do not use lawyers, would there be an agreement? How does your answer here relate private efficiency to social efficiency? Fully explain your answer. Please turn over to Page 5
Page 5 Please turn over to Page 6
Page 6 (b) (5 marks) Suppose the rule of strict liability is imposed on S. Assuming no transaction costs, will there be bargaining? Please turn over to Page 7
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Page 7 (c) (5 marks) Considering your answers in parts (a) and (b), how high can transaction costs become before bargaining is prevented? In your answer, explain what happens if S and WT are required to have their own lawyers? Please turn over to Page 8
Page 8 QUESTION 4: (15 Marks) Fully explain the “tragedy of the commons” p roblem in ocean fishing? Please turn over to Page 9
Page 9 QUESTION 5: (15 Marks) A cyber criminal steals a bank customer ’ s identity enabling him to take the customer ’ s savings. The criminal is arrested later, but has no assets. Should the loss fall on (a) the customer (b) the bank Fully explain your answer using economic analysis. Please turn over to Page 10
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help
Page 10 QUESTION 6: (10 Marks) State the Normative Hobbes Theorem and fully explain how it is different from the Theorem of Coase. Use one (1) example. Total Marks = 100

Related Documents

IMG_4078.jpeg
MAT 240 Project Two2.docx
MAT 240 Project One Final.docx
MAT 240 Module Three Assignment Joshua Rivera.docx
ECO107 Assessment 1(2) (2) (2).docx
vishal busn112 assesment 2.docx
image.jpg
Exam 1 Study guide mgmt 3.docx
Discussion 5 MGMT 4303.docx
4 Union Pacific Nearshoring.pdf
L10 Quiz_ Homework_ Social Science Statistics.pdf
Pfau_problemsplanning Version 1.xlsx
Recommended textbooks for you
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Text book image
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Text book image
Economics For Today
Economics
ISBN:9781337613040
Author:Tucker
Publisher:Cengage Learning
Text book image
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Text book image
Economics:
Economics
ISBN:9781285859460
Author:BOYES, William
Publisher:Cengage Learning
SEE MORE TEXTBOOKS
Recommended textbooks for you
Text book image
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Text book image
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Text book image
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Text book image
Economics For Today
Economics
ISBN:9781337613040
Author:Tucker
Publisher:Cengage Learning
Text book image
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Text book image
Economics:
Economics
ISBN:9781285859460
Author:BOYES, William
Publisher:Cengage Learning
SEE MORE TEXTBOOKS