Economics of Tort Law Flashcards

(29 cards)

1
Q

Explain the Need for Tort Law

A

-Addresses compens. wrongs not arising from contract or prop. dispu.

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2
Q

Define what a tort is

A
  • a civil wrong that causes harm 2 a person or prop.
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3
Q

Explain when tortious liability arrises

A

-breach of du.
-prim. fixed by law
-duty 2wards persons gen.
-breach is redress. by an act. 4 UNLIQ. damages

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4
Q

List types of torts

A
  1. Intentional Torts
  2. Tort of Negligence
  3. Strict Liability Torts
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5
Q

List the essential elements of a Tort Claim

A

-breach of duty
-harm
-causation

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6
Q

TRUE or FALSE: Negligence only requires harm and causation

A

False

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7
Q

List the types of Social Costs

A

-Cost of precaution
-Cost of Exp. Harm

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8
Q

Explain what Expected Social Cost is

A

sum of the cost of prec. + cost of exp. harm

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9
Q

Explain the Wealth/ Health Graph in the Event of a Tort (no compensation handed yet)

A

-curve moves downward
-lower indif. curve

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10
Q

What does the curve in a Wealth/Health graph represent

A
  • indiferrence curve
    (all comb. of health and wealth giving same lev. of satisfact.)
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11
Q

Explain the Wealth/Health Graph in the Event of a tort (compensated granted)

A

-Indifference curve down. ward shifting
-increase health moving right
increase wealth by moving up
-if health irrep. then just shift entire thing upwards in line with health

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12
Q

Explain where the efficient level of precaution can be determined

A

-point that MINIMISES
-soc. cost

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13
Q

‘For Efficiency, Post-Accident Events Don’t Matter’

A
  • Say damage is 1000
    -three scenarios
    1. no pay.
    2. exact comp.
    3. exc. pay.
    -total soc. cost remainds the same–> acc. still des. 1000 in value
    -j diff. distribu.
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14
Q

TRUE or FALSE: ‘Liability rules matter for post-accident fairness.”

A

FALSE- total social cost is the same

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15
Q

Explain the Perpetrator’s and victim’s level of precaution in the event of no liability 4 damage

A

-perp–> non, but if he does he don’t rec. any ben
victim–>bears cost of precaution he takes

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16
Q

Explain the perpetrator’s and victim’s private cost in the event of no liability

A

-perp: 0, minimised
-victim: p(x)A + wx (bears full SC)
-SC minimised at 0

17
Q

TRUE or FALSE: Strict Liability allows for efficient precaution by both parties

A

FALSE: only for injurers

18
Q

Explain the private cost of the injurer and the victim in strict liability

A

Injur priv. cost–> p(x) A + wx
-minimised at x= x*

-Victim priv. cost–> wx
-minimised at x=0

19
Q

Explain the paradox of compensation in the context of bilateral precaution

A

-Neither strict liability or no liability achieves eff. precau. 4 both parties
-simultan.

20
Q

Explain what strict liability is

A
  • Injurer pays damag. 4 any accid. he causes
21
Q

Explain what simple negligence is

A

-Injurer is liab. only
IF they breached their dut. of reas. care

22
Q

what is the mathematical representation for the legal standard of care?

23
Q

what is the efficient level of precaution in simple negligence

A

x^n, which is presumably x*

24
Q

What precuation will the injurer and victim take in simple negligence?

A

-injurer–> x*
-Victim–> x*

25
List variations of negligence rule
1. Simp. Negl. 2. Contribut. negl. 3.Comp. Negl. 4. Strict Liability w contribut. neg.
26
26
TRUE or FALSE: expectation damages occur measure your value of the object minus the price sold to u
- FALSE
27
TRUE or FALSE: the substitution method is prefered over diminished value
-TRUE, based on most situations
28