Law and Economics Exam 1 Fall 2023

Which of the following legal systems is built on interpretation of the law itself, and commentary which clarifies its meaning? a. Common law b. Civil law c. Criminal law d. Customary law e. A and B

b. Civil law

Which of the following accurately describes common law systems? a. Common law persists in Continental Europe (i.e. Europe other than the United Kingdom), among other places b. Under common law, legal arguments appeal to interpretation of the law itself, and to commentary which clarifies its meaning c. Under common law, arguments focus on legal precedents, so law evolves as new precedents are set d. A and B e. A and C

c. Under common law, arguments focus on legal precedents, so law evolves as new precedents are set

Which of the following is likely to exhibit positive externalities? a. National defense against nuclear attacks b. An airport that has loud airplane takeoffs and landings near a neighborhood c. A person choosing what to watch on Netflix, alone by themselves d. Getting vaccinated against a contagious disease e. A and D

e. A and D

Considering the following preferences: Assume that I am presented with a choice between Coca Cola and Pepsi. I am unable to decide whether I like Coca Cola better than Pepsi, Pepsi better than Coca Cola, or if I am indifferent to the two. Which property of rational preferences does this violate (if any)? a. Transitivity b. Completeness c. Reflexivity d. Commutativity e. This set of preferences does not violate any property of rational preferences.

b. Completeness

Recall the two whaling rules: 1. the irons holds the whale; and 2. fast fish loose fish. Which of the following is true? a. Fast fish loose fish is a “bright line” property rule, which makes property rights clear and bargaining easier b. The iron holds the whale is a “bright line” property rule, which makes property rights clear and bargaining easier c. The iron holds the whale, while more complicated to enforce, avoids the incentive to infringe upon other people’s hunts d. A and C are both true e. None of these are true

d. A and C are both true

(Questions 6-10 refer to the following: Imagine that Mike and Walter live next to each other and. have no other neighbors. Mike would like to have a birthday party that will be loud and last late into the night. Walter would like to get a good night’s sleep, which will be interrupted if Mike throws such a party. Imagine that Mike values the party at $200, and Walter values a good night’s sleep at $300. Further imagine that the current allocation of rights is that Walter has a right to quiet in other words, Mike does not have the right to party). Assuming that Coaseian bargaining is possible, which of the following is the most likely outcome of negotiations? a. Mike purchases the right to party from Walter for $175 b. Mike purchases the right to party from Walter for $250 c. Walter purchases the right to a good night’s sleep from Mike for $250 d. Mike and Walter do not engage in trade for the right to party/a good night’s sleep e. A and B are both plausible, and the Coase theorem does not tell us which is more likely.

d. Mike and Walter does not engage in trade for the right to party/a good night’s sleep.

(Questions 6-10 refer to the following: Imagine that Mike and Walter live next to each other and. have no other neighbors. Mike would like to have a birthday party that will be loud and last late into the night. Walter would like to get a good night’s sleep, which will be interrupted if Mike throws such a party. Imagine that Mike values the party at $200, and Walter values a good night’s sleep at $300. Further imagine that the current allocation of rights is that Walter has a right to quiet in other words, Mike does not have the right to party). How much cooperative surplus is available to Mike and Walter? a. $0 b. $50 c. $75 d. $100 e. $200

a. $0

(Questions 6-10 refer to the following: Imagine that Mike and Walter live next to each other and. have no other neighbors. Mike would like to have a birthday party that will be loud and last late into the night. Walter would like to get a good night’s sleep, which will be interrupted if Mike throws such a party. Imagine that Mike values the party at $200, and Walter values a good night’s sleep at $300. Further imagine that the current allocation of rights is that Walter has a right to quiet in other words, Mike does not have the right to party). Imagine that the government changes the rules so that Mike does have the right to party (and he then does have a party). This is which kind of improvement (assuming for now that no bargaining occurs)? a. A Coaseian improvement b. A Kaldor-Hicks c. A Pareto improvement d. B and C e. None of the above

e. none of the above

(Questions 6-10 refer to the following: Imagine that Mike and Walter live next to each other and. have no other neighbors. Mike would like to have a birthday party that will be loud and last late into the night. Walter would like to get a good night’s sleep, which will be interrupted if Mike throws such a party. Imagine that Mike values the party at $200, and Walter values a good night’s sleep at $300. Further imagine that the current allocation of rights is that Walter has a right to quiet in other words, Mike does not have the right to party). Continue to assume that Mike begins with the right to party. Now assume that Coaseian bargaining is possible, which of the following is the most likely outcome of negotiations? a. Mike purchases the right to party from Walter for $175 b. Mike purchases the right to party from Walter for $250 c. Walter purchases the right to a good night’s sleep from Mike for $250 d. Mike and Walter do not engage in trade for the right to party/a good night’s sleep e. A and B are both plausible, and the Coase theorem does not tell us which is more likely.

c. Walter purchases the right to a good night’s sleep from Mike for $250.

(Questions 6-10 refer to the following: Imagine that Mike and Walter live next to each other and. have no other neighbors. Mike would like to have a birthday party that will be loud and last late into the night. Walter would like to get a good night’s sleep, which will be interrupted if Mike throws such a party. Imagine that Mike values the party at $200, and Walter values a good night’s sleep at $300. Further imagine that the current allocation of rights is that Walter has a right to quiet in other words, Mike does not have the right to party). Continue to assume that Mike begins with the right to party. How much cooperative surplus is available to Mike and Walter? a. $0 b. $50 c. $75 d. $100 e. $200

d. $100

What of the following are required to have rational preferences? a. Preferences must be transitive b. Preferences must be complete c. Preferences must be reflexive d. All of the above e. A and C only

d. All of the above

Which of the following statements is true? a. The normative Hobbes approach says “Structure the law so as to minimize transaction costs and lubricate bargaining.” b. The normative Kaldor-Hicks approach says “Structure the law so as to minimize transaction costs and lubricate bargaining.” The normative Coase approach says “It doesn’t matter how you structure the law, private agreements will always lead to efficient outcomes.” d. The normative Hobbes approach says “Structure the law so as to minimize the harm done by failures in private agreements.” e. C and D are both right.

d. The normative Hobbes approach says “Structure the law so as to minimize the harm done by failures in private agreements.”

Which of the following statements is true? a. All Kaldor-Hicks improvements are also Pareto improvements b. All Pareto improvements are also Kaldor-Hicks improvements c. All Kaldor-Hicks improvements are not Pareto improvements, but could be made into Pareto improvements with a transfer of cash d. All Coaseian improvements are not Pareto improvements, but could be made into Pareto improvements with a transfer of cash e. B and C are both true

e. B and C are both true

14. Which of the following is not a source of inefficiency in markets? a. The presence of sales tax b. Sellers and buyers having asymmetric information about the good being bought/sold c. The presence of negative externalities d. The presence of positive externalities e. These are all sources of inefficiency

e. These are all sources of inefficiency

For questions 15-20, consider the following scenario: A farmer and rancher live close to each other. Their property boundaries are well defined, but there is no physical barrier, so the rancher’s cattle may wander onto the farmer’s property and cause damage to the farmer’s crops. Suppose that the farmer can build and maintain a fence around his crops for $50 per year, while the rancher can build and maintain a fence around his ranch for $100 per year. Further suppose that if there is no fence, the rancher’s wandering cattle will cause the farmer $60 in lost profits each year. Suppose that there are no transaction costs between the farmer and the rancher, and that the farmer and rancher are successfully able to engage in Coasiean bargaining. Further assume that if there are “farmer’s rights,” they are protected via damages. If there are “farmer’s rights,” where does Coase predict that the fence will be built? a. Around the farmer’s crops b. Around the rancher’s ranch c. Around both the ranch and the crops d. There won’t be a fence

a. Around the farmer’s crops

For questions 15-20, consider the following scenario: A farmer and rancher live close to each other. Their property boundaries are well defined, but there is no physical barrier, so the rancher’s cattle may wander onto the farmer’s property and cause damage to the farmer’s crops. Suppose that the farmer can build and maintain a fence around his crops for $50 per year, while the rancher can build and maintain a fence around his ranch for $100 per year. Further suppose that if there is no fence, the rancher’s wandering cattle will cause the farmer $60 in lost profits each year. Suppose that there are no transaction costs between the farmer and the rancher, and that the farmer and rancher are successfully able to engage in Coasiean bargaining. Further assume that if there are “farmer’s rights,” they are protected via damages. If there are “rancher’s rights,” where does Coase predict that the fence will be built? a. Around the farmer’s crops b. Around the rancher’s ranch c. Around both the ranch and the crops d. There won’t be a fence

a. Around the farmer’s crops

For questions 15-20, consider the following scenario: A farmer and rancher live close to each other. Their property boundaries are well defined, but there is no physical barrier, so the rancher’s cattle may wander onto the farmer’s property and cause damage to the farmer’s crops. Suppose that the farmer can build and maintain a fence around his crops for $50 per year, while the rancher can build and maintain a fence around his ranch for $100 per year. Further suppose that if there is no fence, the rancher’s wandering cattle will cause the farmer $60 in lost profits each year. Suppose that there are no transaction costs between the farmer and the rancher, and that the farmer and rancher are successfully able to engage in Coasiean bargaining. Further assume that if there are “farmer’s rights,” they are protected via damages. If there are farmer’s rights, which of the following is the most likely outcome of Coasiean bargaining? a. The farmer pays for the fence (wherever it is built) and makes an additional side payment of $5 to the rancher. b. The farmer pays for the fence (wherever it is built) and makes an additional side payment of $25 to the rancher. c. The rancher pays for the fence (wherever it is built) and makes an additional side payment of $5 to the farmer. d. The rancher pays for the fence (wherever it is built) but does not make an additional payment to the farmer. e. A and B are equally plausible outcomes, and the Coase theorem does not tell us which one is more likely to occur.

c. The rancher pays for the fence (wherever it is built) and makes an additional side payment of $5 to the farmer.

For questions 15-20, consider the following scenario: A farmer and rancher live close to each other. Their property boundaries are well defined, but there is no physical barrier, so the rancher’s cattle may wander onto the farmer’s property and cause damage to the farmer’s crops. Suppose that the farmer can build and maintain a fence around his crops for $50 per year, while the rancher can build and maintain a fence around his ranch for $100 per year. Further suppose that if there is no fence, the rancher’s wandering cattle will cause the farmer $60 in lost profits each year. Suppose that there are no transaction costs between the farmer and the rancher, and that the farmer and rancher are successfully able to engage in Coasiean bargaining. Further assume that if there are “farmer’s rights,” they are protected via damages. If there are rancher’s rights, which of the following is the most likely outcome of Coasiean bargaining? a. The farmer pays for the fence (wherever it is built) and makes an additional side payment of $5 to the rancher. b. The farmer pays for the fence (wherever it is built) and makes an additional side payment of $25 to the rancher. c. The rancher pays for the fence (wherever it is built) and makes an additional side payment of $5 to the farmer. d. The rancher pays for the fence (wherever it is built) but does not make an additional payment to the farmer. e. The farmer pays for the fence (wherever it is built) but does not make an additional payment to the rancher.

e. The farmer pays for the fence (wherever it is built) but does not make an additional payment to the rancher.

For questions 15-20, consider the following scenario: A farmer and rancher live close to each other. Their property boundaries are well defined, but there is no physical barrier, so the rancher’s cattle may wander onto the farmer’s property and cause damage to the farmer’s crops. Suppose that the farmer can build and maintain a fence around his crops for $50 per year, while the rancher can build and maintain a fence around his ranch for $100 per year. Further suppose that if there is no fence, the rancher’s wandering cattle will cause the farmer $60 in lost profits each year. Suppose that there are no transaction costs between the farmer and the rancher, and that the farmer and rancher are successfully able to engage in Coasiean bargaining. Further assume that if there are “farmer’s rights,” they are protected via damages. Now suppose that the cattle cause $40 worth of damage. If there is a farmer’s rights regime, which of the following is the most likely? a. The rancher pays for the fence and makes an additional side payment of $25 to the farmer. b. The rancher pays for the fence and makes an additional side payment of $50 to the farmer. c. The rancher pays for the fence but does not make an additional side payment. d. The farmer does not build a fence and receives nothing from the rancher. e. The rancher does not pay for the fence and pays the farmer $40.

e. The rancher does not pay for the fence and pays the farmer $40.

For questions 15-20, consider the following scenario: A farmer and rancher live close to each other. Their property boundaries are well defined, but there is no physical barrier, so the rancher’s cattle may wander onto the farmer’s property and cause damage to the farmer’s crops. Suppose that the farmer can build and maintain a fence around his crops for $50 per year, while the rancher can build and maintain a fence around his ranch for $100 per year. Further suppose that if there is no fence, the rancher’s wandering cattle will cause the farmer $60 in lost profits each year. Suppose that there are no transaction costs between the farmer and the rancher, and that the farmer and rancher are successfully able to engage in Coasiean bargaining. Further assume that if there are “farmer’s rights,” they are protected via damages. Now suppose that the cattle cause $40 worth of damage. If there is a rancher’s rights regime, which of the following is the most likely? a. The rancher pays for the fence and makes an additional side payment of $25 to the farmer. b. the rancher pays for the fence and makes an additional side payment of $50 to the farmer. c. The rancher pays for the fence but does not make an additional side payment. d. The farmer does not build a fence and receives nothing from the rancher. e. The rancher does not pay for the fence and pays the farmer $40.

d. The farmer does not build a fence and receives nothing from the rancher.

Which of the following is one of the fundamental economic questions of property law? a. How are property rights established b. What can an owner do with her property? c. How do we resolve disputes about property ownership? d. What things may be privately owned? e. All of the above

e. All of the above

Questions 22-23 refer to the following scenario. Imagine a scenario where there is a power plant that creates pollution (call them the “polluter”) and a neighbor who is bothered by the pollution (the “neighbor”). “No remedy” means that the polluter has the right to pollute; “injunction” means that the neighbor has an entitlement to no pollution, protected by an injunction; “damages” means that the neighbor has an entitlement to no pollution, protected by damages that exactly compensate for the harm done. Which of the following rankings of the neighbor’s preferred remedies is true? a. no remedy injunction damages b. no remedy damages injunction c. damages injunction no remedy d. injunction damages no remedy e. there is no general ranking like this

d. injunction damages no remedy

Questions 22-23 refer to the following scenario. Imagine a scenario where there is a power plant that creates pollution (call them the “polluter”) and a neighbor who is bothered by the pollution (the “neighbor”). “No remedy” means that the polluter has the right to pollute; “injunction” means that the neighbor has an entitlement to no pollution, protected by an injunction; “damages” means that the neighbor has an entitlement to no pollution, protected by damages that exactly compensate for the harm done. Which of the following rankings of the polluter’s preferred remedies is true? a. no remedy injunction damages b. no remedy damages injunction c. damages injunction no remedy d. injunction damages no remedy e. there is no general ranking like this

b. no remedy damages injunction

Questions 24-30 refer to the following scenario: Suppose that two adjacent farmers are each deciding whether to farm his own land, or to steal crops from his neighbor. Suppose that planting and watering costs $20; the crops that either farmer can grow are worth $50, and stealing costs $15. Note that if both farmers choose to steal (rather than to farm), there will be nothing to steal (so they don’t exert any effort in stealing). Which of the following payoff matrices describes the game? Player 1’s payoff is listed first; Player 2’s payoff is listed second.

A	Player 2
Player 1		Farm	Steal
	Farm	35,35	30,-15
	Steal	-15,30	0,0

 

B	Player 2
Player 1		Farm	Steal
	Farm	30,30	35,-20
	Steal	-20,35	0,0

 

C	Player 2
Player 1		Farm	Steal
	Farm	35,35	-15,30
	Steal	30,-15	0,0

 

D	Player 2
Player 1		Farm	Steal
	Farm	30,30	-20,35
	Steal	35,-20	0,0

 

E: None of the above matrices represent the game described above.

 

D	Player 2
Player 1		Farm	Steal
	Farm	30,30	-20,35
	Steal	35,-20	0,0

Questions 24-30 refer to the following scenario: Suppose that two adjacent farmers are each deciding whether to farm his own land, or to steal crops from his neighbor. Suppose that planting and watering costs $20; the crops that either farmer can grow are worth $50, and stealing costs $15. Note that if both farmers choose to steal (rather than to farm), there will be nothing to steal (so they don’t exert any effort in stealing). What is the payoff from the Nash equilibrium?  (Player 1’s payoff is listed first) a. (30,30) b. (-35,20) c. (-20,35) d. (0,0) e. There are two Nash equilibria, with payoffs of (-35,20) and (20,-35)

d. (0,0)

Questions 24-30 refer to the following scenario: Suppose that two adjacent farmers are each deciding whether to farm his own land, or to steal crops from his neighbor. Suppose that planting and watering costs $20; the crops that either farmer can grow are worth $50, and stealing costs $15. Note that if both farmers choose to steal (rather than to farm), there will be nothing to steal (so they don’t exert any effort in stealing). How much total cooperative surplus is available to the Players, if they can coordinate? a. 0 b. 10 c. 40 d. 60 e. 70

d. 60

Questions 24-30 refer to the following scenario: Suppose that two adjacent farmers are each deciding whether to farm his own land, or to steal crops from his neighbor. Suppose that planting and watering costs $20; the crops that either farmer can grow are worth $50, and stealing costs $15. Note that if both farmers choose to steal (rather than to farm), there will be nothing to steal (so they don’t exert any effort in stealing). Now assume that the farmers come up with an idea to institute property rights.  They establish a system that would cost c to everyone who plays by the rules (farms), but would give a penalty P to anyone who is steals. (Assume that if they enact this system, everyone who steals will get caught 100% of the time).  Which of the following inequalities must be satisfied in order to achieve the cooperative outcome? a. 30-c ³ 35-P b. 35-c ³ 30-P c. 35-P ³ 30-c d. 30-P ³ 35-c e. None of these values will achieve the cooperative outcome

a. 30-c ³ 35-P

Questions 24-30 refer to the following scenario: Suppose that two adjacent farmers are each deciding whether to farm his own land, or to steal crops from his neighbor. Suppose that planting and watering costs $20; the crops that either farmer can grow are worth $50, and stealing costs $15. Note that if both farmers choose to steal (rather than to farm), there will be nothing to steal (so they don’t exert any effort in stealing). Moving from the outcome where both players steal to an outcome where Player 1 Farms and Player 2 steals is which of the following:

a. A Pareto improvement (but not a Kaldor Hicks improvement)

b. A Kaldor Hicks improvement (but not a Pareto improvement)

c. Both a Pareto improvement and a Kaldor Hicks improvement

d. Neither a Pareto improvement nor a Kaldor Hicks improvement.

b. A Kaldor Hicks improvement (but not a Pareto improvement)

Questions 24-30 refer to the following scenario: Suppose that two adjacent farmers are each deciding whether to farm his own land, or to steal crops from his neighbor. Suppose that planting and watering costs $20; the crops that either farmer can grow are worth $50, and stealing costs $15. Note that if both farmers choose to steal (rather than to farm), there will be nothing to steal (so they don’t exert any effort in stealing). Moving from the outcome where both players steal to an outcome where both players Farm is which of the following:

a. A Pareto improvement (but not a Kaldor Hicks improvement)

b. A Kaldor Hicks improvement (but not a Pareto improvement)

c. Both a Pareto improvement and a Kaldor Hicks improvement

d. Neither a Pareto improvement nor a Kaldor Hicks improvement.

c. Both a Pareto improvement and a Kaldor Hicks improvement

Questions 24-30 refer to the following scenario: Suppose that two adjacent farmers are each deciding whether to farm his own land, or to steal crops from his neighbor. Suppose that planting and watering costs $20; the crops that either farmer can grow are worth $50, and stealing costs $15. Note that if both farmers choose to steal (rather than to farm), there will be nothing to steal (so they don’t exert any effort in stealing). Which of the following is a positive economic statement?

a. The current unemployment rate is 3.7%

b. Reducing taxes will lead to economic growth

c. The Federal Reserve increasing interest rates will lead to a reduction in inflation rates

d. As unemployment increases, inflation decreases

e. These are all positive economic statements

e. These are all positive economic statements

Calabresi and Melamed suggest which of the following?

a. When transaction costs are low, an injunction is more efficient than damages

b. When transaction costs are high, damages are more efficient than injunction

c. When transaction costs are low, damages are more efficient than injunction

d. Both A and B are true  

d. Both A and B are true  

Which of the following describe the tradeoffs between laws that grant property rights based on first possession versus rules that grant property rights based on tied ownership?

a. First possession rules have the advantage of being easy to administer but the disadvantage of discouraging preemptive investment in possessory acts.

b. First possession rules have the advantage of being easy to administer. But the disadvantage of encouraging preemptive investment in possessory acts.

c. Tied ownership rules have the advantage of being easy to administer but the disadvantage of encouraging preemptive investment in possessory acts

d. A and C are both true

e. B and C are both true

b. First possession rules have the advantage of being easy to administer. But the disadvantage of encouraging preemptive investment in possessory acts.

Questions 33-37 refer to the following scenario: Suppose that two firms lease property above a shared natural gas deposit, and have the rights to mine the minerals below their leased land.  The gas in the deposit is worth $200.  Each company can choose to either drill fast, which costs $50, or drill slowly, which costs $10. First imagine that if one firm drills fast and the other drills slowly, the fast driller will get 75% of the gas, and the slow driller gets the remaining 25%.  If they both drill the same speed, they each get 50% of the gas. Which of the following payoff matrices describes the game?  Firm 1’s payoff is listed first; Firm 2’s payoff is listed second.

A	Firm 2
Firm 1		Slow	Fast
	Slow	50,50	40,100
	Fast	100,40	90,90

 

B	Firm 2
Firm 1		Slow	Fast
	Slow	90,90	40,100
	Fast	100,40	50,50

 

C	Firm 2
Firm 1		Slow	Fast
	Slow	90,90	100,40
	Fast	40,100	50,50

 

D	Firm 2
Firm 1		Slow	Fast
	Slow	90,90	90,50
	Fast	50,90	50,50

E: None of the above matrices describe this game

B

Questions 33-37 refer to the following scenario: Suppose that two firms lease property above a shared natural gas deposit, and have the rights to mine the minerals below their leased land.  The gas in the deposit is worth $200.  Each company can choose to either drill fast, which costs $50, or drill slowly, which costs $10. What is the efficient outcome of the game described in Question 33?

a. (Slow, Fast)

b. (Slow, Slow)

c. (Fast, Slow)

d. (Fast, Fast)

e. B and D are both efficient

b. (Slow, Slow)

Questions 33-37 refer to the following scenario: Suppose that two firms lease property above a shared natural gas deposit, and have the rights to mine the minerals below their leased land.  The gas in the deposit is worth $200.  Each company can choose to either drill fast, which costs $50, or drill slowly, which costs $10. Moving from the outcome where both players drill fast to an outcome where both drill slowly is which of the following:

a. A Pareto improvement (but not a Kaldor Hicks improvement)

b. A Kaldor Hicks improvement (but not a Pareto improvement)

c. Both a Pareto improvement and a Kaldor Hicks improvement

d. Neither a Pareto improvement nor a Kaldor Hicks improvement.

c. Both a Pareto improvement and a Kaldor Hicks improvement

Questions 33-37 refer to the following scenario: Suppose that two firms lease property above a shared natural gas deposit, and have the rights to mine the minerals below their leased land.  The gas in the deposit is worth $200.  Each company can choose to either drill fast, which costs $50, or drill slowly, which costs $10. Now imagine that no matter the speed that each firm drills, each has rights to 50% of the gas.  The costs of drilling remain unchanged (drilling fast costs$50; drilling slowly costs $10.  The gas is still worth $200) Which of the following payoff matrices describes the modified game?  Firm 1’s payoff is listed first; Firm 2’s payoff is listed second.

 

A	Firm 2
Firm 1		Slow	Fast
	Slow	50,50	40,100
	Fast	100,40	90,90

 

B	Firm 2
Firm 1		Slow	Fast
	Slow	90,90	40,100
	Fast	100,40	50,50

 

C	Firm 2
Firm 1		Slow	Fast
	Slow	90,90	100,40
	Fast	40,100	50,50

 

D	Firm 2
Firm 1		Slow	Fast
	Slow	90,90	90,50
	Fast	50,90	50,50

E: None of the above matrices describe this game

D

Questions 33-37 refer to the following scenario: Suppose that two firms lease property above a shared natural gas deposit, and have the rights to mine the minerals below their leased land.  The gas in the deposit is worth $200.  Each company can choose to either drill fast, which costs $50, or drill slowly, which costs $10. What is the Nash Equilibrium of the modified game described in Question 36?  (Listed as (Firm 1, Firm 2))

b. (Slow, Fast)

c. (Slow, Slow)

d. (Fast, Slow)

e. (Fast, Fast)

c. (Slow, Slow)

In the case of Boomer v. Atlantic Cement Co., the Court ruled for the neighbors and ordered Atlantic Cement Co. to pay them permanent damages, paid as servitude to the land.  What does this mean?

a. Atlantic Cement Co. has paid damages and it allowed to continue its nuisance behavior in perpetuity, but only as to the current neighbors.  If a homeowner sells his/her home to a new person, the new neighbor is allowed to collect damages from Atlantic. 

b. Atlantic Cement Co. has paid damages and it allowed to continue its nuisance behavior in perpetuity. If a homeowner sells his/her home to a new person, the new neighbor is NOT allowed to collect damages from Atlantic. 

c. The neighbors have to sue Atlantic Cement Co. every year to get new damages, if the nuisance behavior continues.

d. The neighbors have to pay Atlantic for their legal fees.

e. Atlantic Cement Co is judgement-proof

b. Atlantic Cement Co. has paid damages and it allowed to continue its nuisance behavior in perpetuity. If a homeowner sells his/her home to a new person, the new neighbor is NOT allowed to collect damages from Atlantic. 

What are the two principles for establishing ownership of fugitive property?

a. Tied ownership and the principle of accession

b. First possession and possessory acts

c. Tied ownership and first possession

d. First possession and “finders keepers”

c. Tied ownership and first possession

Suppose that you’re hiking in the woods and there’s an unexpected snowstorm.  You’re cold, hungry, and lost, and it’s getting dark.  If you stay outside, you might freeze to death overnight.  You notice a small cabin, with no one in it.  You try the door but it’s locked.  You break the lock, take some food, light a fire in the fireplace, and sleep in one of the beds.   In the morning, the owners come to the cabin, and call the police.  Which of the following is true, based on the ruling in Ploof v. Putnam?

a. You can’t be charged with trespassing and you don’t need to reimburse the owners for damages (broken door, stolen food and firewood)

b. You can’t be charged with trespassing but you do need to reimburse the owners for damages.

c. You can be charged with trespassing and you need to reimburse the owners for damages.

d. You can be charged with trespassing but you don’t need to reimburse the owners for damages

e. The case of Ploof v. Putnam can’t tell us anything about how a court would rule in the above scenario.

 

b. You can’t be charged with trespassing but you do need to reimburse the owners for damages.