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N13437-E1

The University of Nottingham

BUSINESS SCHOOL

A LEVEL 3 MODULE, AUTUMN SEMESTER 2012-2013

LAW AND ECONOMICS

Time allowed ONE hour THIRTY minutes

__________________________________________________________________________

Candidates may complete the front cover of their answer book and sign their desk card but
must NOT write anything else until the start of the examination period is announced

Answer TWO Questions

All questions carry equal marks

Dictionaries are not allowed with one exception. Those whose first language is not English
may use a standard translation dictionary to translate between that language and English
provided that neither language is the subject of this examination. Subject specific
translation dictionaries are not permitted.

No electronic devices capable of storing and retrieving text, including electronic dictionaries,
may be used.

DO NOT turn examination paper over until instructed to do so

ADDITIONAL MATERIAL: None

N13437-E1 Turn over

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2 N13437-E1

1. State and explain the Coase Theorem in its positive version. Is the normative version
of the theorem a necessary consequence of this?

2. In determining liability in negligence, how important is it that the court applies a legal
standard of care equal to the socially optimal amount of care?

3. What is the effect on a rational potential injurer of causation being an ingredient of

negligence? Would the removal of causation as an ingredient improve social efficiency?

4. “When a contract has been breached, the law should attempt to put the party breached
on back into the position she would have been in but for the contract.” Explain and
critically examine.

5. Would a hypothetical rational person alter her conduct in the light of the Fraud Act
2006? If so, in what way or ways?

6. Taking into account alternative financing arrangements, does an American costs rule
rather than an English costs rule make access to justice easier? Does it make it too
easy?

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