Asked by Aracelli Garcia on Jul 28, 2024
Verified
You love Christmas and elaborately decorate your home and yard. It is such a spectacle that hundreds of people drive by your house each day to enjoy the display. The noise and traffic disturb your neighbors who sue you, and you are required to take down your display permanently. This is an example of
A) the Coase theorem.
B) a liability rule.
C) an injunction.
D) the free-rider problem.
Liability Rule
A legal framework in which an infringer must compensate the owner for unauthorized use of property, typically applied in cases of copyright or patent infringements.
Injunction
A court order forbidding the continuation of behavior that leads to damages.
- Acquire knowledge on the use of liability rules and injunctions for the mitigation of externalities.
Verified Answer
BG
Brandon GutiiJul 30, 2024
Final Answer :
C
Explanation :
This scenario is an example of an injunction, which is a court order requiring a party to do or cease doing a specific action. In this case, the court orders the removal of the Christmas display due to the disturbance it causes to the neighbors.
Learning Objectives
- Acquire knowledge on the use of liability rules and injunctions for the mitigation of externalities.