In Palsgraf V

question 181

Multiple Choice

In Palsgraf v. Long Island Railroad, where Palsgraf was hit by machinery that fell when an explosion occurred at a train station, and she sued the railroad for negligence, the New York high court held that the railroad:

• A) was negligent for exposing Palsgraf to danger, so could be liable for her injury
• B) was negligent for exposing Palsgraf to danger, but the cause of the accident was a careless passenger, not the railroad, so it was relieved of liability by intervening conduct
• C) was negligent for exposing Palsgraf to danger, but the explosion was not the proximate cause of the accident, so there was no liability
• D) was negligent for exposing Palsgraf to danger, but its actions were not a substantial factor in what caused the accident, so there was no liability
• E) was not liable because of a lack of proximate cause

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Definitions:

Price Fixing

An illegal agreement among competitors to set, raise, or lower prices to predetermined levels, thereby undermining free market competition.

Deadweight Loss

A loss in economic efficiency that can occur when equilibrium for a good or service is not achieved or is not achievable.

Price Ceiling

A government-imposed limit on how high the price of a product can be, intended to protect consumers from high prices.

Monopolist

A single seller in a market who controls the supply of a product or service, and thus, has significant power to set prices.