ECO320H1 : textbook notes

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15 Jan 2011
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Distinguish private and public goods to answer question. Private ownership is only appropriate when there is a rivalry for the goods and when it is excludable. Patent, copyright, trademark system all protect intellectual property. Information economics: innovation causes temporary disequilibrium, nonappropriability (information cheap to transmit), information becoming increasingly non-rivalrous, non-excludable, therefore unregulated market will undersupply creative work/innovation and thus four remedies exist. Intellectual property law (patent, copyright, trademark act as temporary monopolies, trademark is permanent monopoly) Intellectual property law encourages creation and dissemination (trade off), optimal patent duration is one which encourages the latter and discourages the former. Patents, 20 year monopoly granted for invention by us patent office, also breadth requirements are stated, how similar inventions can be, broad rule gives rights to first inventor, narrow rule exclusive rights to first, property rights to second. Property law encourages production, discourages theft and reduces cost of protecting goods.