1) An airplane crashes as the result of a non-negligent defect in an instrument supplied by A . The airplane was manufactured by B from various components, including the instrument from A, and is operated by C, an airline. What economic difference does it make, if any, whether A is liable for the damages resulting from the crash, or B or C?
2) Is it arguable that there is a greater economic justification for strict products liability to bystanders that for strict liability to purchasers of the product?
3) If the tort system were deemed a method of social insurance rather than one of deterrence of uneconomical accidents, would awards in tort cases be on average higher or lower than under the deterrence rationale?
4) Discuss the economic pros and cons of making social hosts liable for accidents caused by guests who have drunk too much liquor at the host’s party.
5) Suppose that a person who is burned in accident suffers intense pain for one week and then fully recovers. What does “perfect compensation” mean in principle to the bum? Why do you expect actual compensation to be imperfect?
6) Offer an economic explanation for why the owner of a dog is liable for the harm it causes due to negligence, whereas the owner of a tiger is strictly liable for any harm that it causes?
7) The rungs of ladders must be constructed to support the weight of the people who climb them. Compare the relative efficiency of a precise government standard for ladders concerning their weight that the rungs must support, as opposed to the rule that the strength of the rungs should be determined as suits arise in a case-by-case basis using the Hand rule.