You Accidentally Run into Your Next Door Neighbor's Fence and Destroy

question 113

Multiple Choice

You accidentally run into your next door neighbor's fence and destroy it. Your neighbor sues you and you are required to pay $1,000 to repair the fence. This is an example of

• A) the Coase theorem.
• B) a liability rule.
• C) an injunction.
• D) the free-rider problem.

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Definitions:

Excess

The amount that is more than necessary, needed, or specified; in insurance, it refers to the part of a claim that the insured must pay, which is not covered by the insurer.

Civil Wrong

An action that harms someone else but is not necessarily a criminal act; typically addressed through civil legal proceedings for damages or restitution.

Restatement Third, Torts

A set of principles and guidelines in U.S. tort law, organized by the American Law Institute, intended to clarify, modernize, and otherwise improve tort law.

Economic Harm

Financial or monetary damage suffered by an individual, organization, or economy due to certain actions, events, or policies.