ECO320H1 Lecture Notes - Lecture 1: Coase Theorem, Pareto Efficiency, Takers
Document Summary
Property is a bundle of rights: 1. An owner is free to exercise the rights over his or her property: 2. Non-owners are forbidden to interfere with an owner"s exercising the rights over his or her property. In economics- the utility of a good or service can be lessened when property rights in that good or service is weakened. 2 standard remedies for protecting property right: injunctions : order from the court, compensation. Lowering the cost of enforcing (using the remedies of property rights) When the cost to obtaining a revenue is high, it weakens property lghts. Landlord and tenants will not be included in the test. Landlords are like small producers, they are price takers, cannot set the price of the rent. Tenants are not better off with rent control, due to the supply of apartments reducing. If the farmer knows he has a right and can sue the rancher.
