Q&A Hero

Q: Which of the following refers to a set of rights to control a tangible or intangible thing? a) Property b) Norm c) Contract d) Tort

Q: Which of the following is characteristic of common law? a) It is written in codes based on legal principles, and judges decide cases based on those codes and the principles expressed in them. b) Its evolution was independent of the precedents set by public courts. c) It typically does not use an adversarial system of litigation. d) It can adjust to changing circumstances without having to wait for new statutes to be enacted by legislation.

Q: Private orderings are sustained by the adherence to ________. a) the Constitution b) legal sanctions c) statutes d) norms

Q: In ________, or judge-made law, the decisions made by judges serve as precedents for future cases, and the set of precedents establishes a body of law. a) civil law b) common law c) statutory law d) canon law

Q: ________ specifies the length of a patent and defines the limitations on filing lawsuits. a) Customary law b) Case law c) Statutory law d) Regulatory law

Q: The standard of strict liability is considered by some to assign too much of the cost of injuries to firms and too little to consumers, distorting the incentives for care.

Q: Punitive damages awards are governed by clear constitutional guidelines.

Q: In a case in which several parties have a role in an injury, such as a manufacturer and a distributor or a manufacturer and the government, all may be held liable.

Q: Products liability cases that are consolidated into class action lawsuits, generally increases the costs of litigation.

Q: Liability awards can never dissuade firms from producing certain desirable products.

Q: The Coase theorem indicates that the distributive consequences of a legal standard can be independent of their efficiency consequences.

Q: Liability costs affect the prices of products and safety decisions.

Q: The legal standard for imposing compensatory damages is higher than that for punitive damages.

Q: The principal form of damage awarded in liability cases is punitive damage.

Q: A design is defective if a reasonable alternative design is available to reduce or avoid a foreseeable risk.

Q: The liability system impedes decentralized decision making on the part of producers and consumers.

Q: The purpose of the tort system is to provide incentives for people and firms to take care to avoid harm.

Q: Liquidated damages are not limited to compensation for harm and are intended as penalties for particular actions.

Q: One purpose of contracts is to reduce transactions costs associated with circumstances that develop during the fulfillment of the agreement.

Q: Breaches are permissible under circumstances where it is economically efficient not to fulfill the conditions of the contract.

Q: Contracts make the mortgage lending market possible.

Q: Contracts are governed by both common law and by statutes pertaining to particular types of contracts and transactions.

Q: Trade secret protection can never be perpetual, and the secrets have to be registered in order to ensure their protection.

Q: A trade secret is almost anything that is unique and of value or potential value to a company.

Q: The appropriability of returns in the music and film industries has been adversely affected by the advancement of Internet and MP3 technology.

Q: The benefit of a patented invention to society increases with the duration of its monopoly.

Q: Intellectual property is generally protected indefinitely.

Q: The advantage of civil law is that it can adjust to changing circumstances without having to wait for new statutes to be enacted by legislation.

Q: A feasible alternative to public order provided by the law is private order based on private assurances among trading partners.

Q: Why is the products liability system considered imperfect? Use examples to support your answer.

Q: What are the allowable defenses under strict liability?

Q: What remedies do courts use in the event of breach?

Q: Describe the principal forms of protection for intellectual assets. Patent: A patent may be granted for an invention of any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof. A patent establishes a property right that allows the holder to exclude others from using the invention; that is, a patent grants a monopoly to the inventor. Patents are also granted for designs and for plants as well as for business methods. The principal type of patent is a utility patent, which has a duration of 20 years beginning with the filing of the patent application with the Patent and Trademark Office. Trade secrets: A trade secret is almost anything that is unique and of value or potential value to a company. This includes process information, operating methods, programs, and business plans. To receive protection the information must be adequately protected by the company on a continual basis. Trade secret protection can be perpetual, and the secrets do not have to be registered. Remedies for violations of trade secrets include injunctions and compensatory damages. Trade secret law has been used to prohibit employees who move from one company to another to take along information from their former employer. Trademarks: A trademark provides social and private value. The social value results from reducing search costs for consumers by allowing branding of products. Branding can also support a reputation for quality, uniformity, or service. Remedies for infringement can take the form of injunctions and compensatory damages. The requirement for a trademark is distinctiveness. Page reference: 384 Page reference: 387 Learning Outcome: Discuss the role of ethics and social responsibility in management

Q: What is common law? What is the advantage of common law and why is it an important aspect of the legal system?

Q: From the perspective of producers, damage awards ________. a) facilitates the estimation of the ex post consequences of the producers ex ante decisions b) are difficult to predict c) act as prime deterrents to insurance companies that disallow producers to insure against that risk d) are highly predictable

Q: The punitive damages system has been criticized because ________. a) punitive damages awards are governed neither by statute nor clear constitutional guidelines b) the juries are not free to address punitive damages as they see fit c) the legal standard for imposing punitive damages is lower than that for compensatory damages d) punitive damages are bound by many constitutional limits

Q: Which of the following is a demerit of the liability system? a) The liability system is costly to operate. b) Punitive damages awards are largely governed by strict constitutional guidelines. c) The insurance system prohibits firms to insure against the risks of damage awards. d) The standard of strict liability assigns too much of the cost of injuries to consumers and too little to firms, distorting the incentives for care.

Q: Most products liability cases are filed in ________. a) district courts b) state courts c) magistrates court d) the Supreme Court

Q: What are the factors that enabled China to assume market leadership in the solar panel market? What were the market signals for solar panels in Europe and the United States?

Q: Write a short note on the costs of subsidization.

Q: Analyze the economic and political rationales behind subsidization.

Q: China took the lead in the production of solar panels primarily because ________. a) labor costs in China were very low relative to that in Europe and the United States b) the domestic demand for solar panels fell sharply c) the price of pure silicon rose dramatically as supply caught up with demand d) demand-side subsidization was not implemented in the United States

Q: Which of the following is true with regard to the costs of subsidization? a) Subsidization in the form of high feed-in tariffs lowers electricity prices. b) U.S. consumers had benefited from the cost-efficient location of production in China even though it meant the loss of high-paying jobs in the United States. c) The demand-side subsidies increased the negative externalities from emissions. d) Renewable energy production such as solar and wind power was cost competitive and hence was not dependent on subsidies.

Q: Supply-side subsidies include ________. a) tax credits for households to install solar panels on rooftops b) tax credits for businesses to purchase electric cars c) high feed-in tariffs for power producers d) grants for households to purchase electric cars

Q: Demand-side subsidies include ________. a) tax credits for households to install solar panels on rooftops b) electric utilities for smart grid infrastructure b) high feed-in tariffs for power producers c) loan guarantees to solar panel producers

Q: Which of the following is an economic advantage of the subsidization of renewable power? a) Subsidization decreases dependence on imported fuels. b) Subsidization renders the adverse effects of traditional energy sources harmless. c) Subsidies for renewable power plants do not affect states with budget deficits. d) Subsidies for renewable power plants increase the tax revenue of the country substantially.

Q: Solar power plants in California faced nonmarket opposition because ________. a) political lobbies encouraged the use of coal and natural gas b) most solar power plants failed to meet the specified safety regulations and standards c) of protests from environmentalists who claimed that such projects posed a veritable threat to the wildlife of the region d) the government failed to communicate the benefits of renewable energy to people residing in the region

Q: Critics of the American Recovery and Reinvestment Act were of the opinion that ________. a) the government provided companies with low-cost loans from government supported banks b) the Department of Energy did not administer the loan guaranties based on applications by companies c) the subsidies offered by the government were fairly inadequate d) the government was trying to pick winners rather than allowing the market to determine the winners

Q: The growing market share of Chinese wind tower and turbine producers generated complaints that ________. a) the quality of material used for producing wind towers and turbines by American companies was inferior and resulted in loss of market share b) the subsidies provided to U.S. wind power companies were being used to purchase equipment from abroad rather than to create jobs in the United States c) importing turbines from China violated the terms and conditions of trade set down by the International Trade Centre d) the subsidies provided to U.S. wind power companies were fairly inadequate compared to that provided to Chinese companies by the Chinese government

Q: Why were the loan guarantee and cash option awarded to wind power producers jeopardized? a) State public utility regulatory agencies were barred by law from determining wind energy prices. b) The huge federal budget deficit required measures to reduce expenditure. c) State public utility regulatory agencies gave a negligible premium for wind power. d) The price of natural gas fell considerably.

Q: Which of the following challenges did American renewable energy companies face in 2011? a) heavy taxation by a debt-ridden government b) diminishing competition in the market c) innovation and technological change d) public ignorance over environmental issues

Q: The nonmarket risk to demand-side subsidization stemmed both from government budget concerns and imported solar panels that hindered achieving the political objective of creating jobs.

Q: The principal risk to subsidization through high feed-in tariffs was from business customers forced to pay higher prices for electricity.

Q: Supply-side subsidization did not face market risks, whereas subsidization through high feed-in tariffs was subject to high budget pressures.

Q: The U.S. government provided subsidization on both the demand and supply sides of the market for renewable power.

Q: The Chinese government views renewable energy as an attractive industry for growth.

Q: The size of the Chinese economy implies that resources cannot be readily mobilized by the government in the domestic capital and factor input markets.

Q: Chinese manufacturers with conventional photovoltaic technology set the cost standard for the renewable energy industry.

Q: The challenge to the subsidies for renewable power and solar power in particular came from entrepreneurial politics.

Q: In the short run, the subsidies increased the budget deficit.

Q: Solar power producers and their suppliers were well organized.

Q: Many smart grid applications were driven more by opportunities for efficiency than by government support.

Q: Renewable energy production was dependent on subsidies because it was not cost competitive.

Q: Supply-side subsidies were less likely to create U.S. jobs, since they were not restricted to companies producing in the United States.

Q: The demand-side subsidies decreased the supply of renewable power and increased the negative externalities from emissions.

Q: Subsidization in the form of high feed-in tariffs raises electricity prices.

Q: The direct costs of subsidies such as grants and loan guaranties are the corresponding government budget expenditures and liabilities.

Q: Rents from demand-side subsidization were earned by power producers and the producers of power generation inputs, such as solar panels.

Q: High feed-in tariffs and RPS were more likely to be victims of the budget process.

Q: Indirect subsidies such as high feed-in tariffs were funded by higher prices to consumers of electricity.

Q: Demand-side subsidies are provided to power producers.

Q: Subsidization of renewable power deters producers from realizing economies of scale.

Q: Subsidization was economically disadvantageous because it increased the nations dependence on imported fuels.

Q: Wind power differed from solar power in that blades and tower sections were less expensive to ship than were solar panels.

Q: Nonmarket risks can arise from private politics, including consumer reactions, activist and NGO challenges, and changes in public sentiment.

Q: Depending extensively on government subsidies for solar power is not free from risks.

Q: Write a short note on the Superfund outlining its significance.

Q: Write short notes on The Regional Greenhouse Gas Initiative (RGGI).

Q: How did the United States of America respond to the Kyoto protocol? What were the principal approaches adopted by the United States of America with respect to the protocol?

Q: State and explain the different components of the control of an externality in a tradable permits system.