To determine the optimal allocation of resources.

To evaluate the fairness and justice of legal rules.

To predict the behavior of individuals and firms in response to legal rules.

To promote economic growth and development.

The Pareto efficiency theorem.

The Coase theorem.

The Arrow impossibility theorem.

The Hotelling's lemma.

A cost or benefit that is imposed on a third party as a result of an economic activity.

A tax or subsidy that is imposed by the government on a particular industry.

A regulation that is imposed by the government on a particular industry.

A contract between two or more parties that specifies the terms of their economic relationship.

A theorem that states that externalities can be eliminated through bargaining between the affected parties.

A theorem that states that the optimal level of pollution is zero.

A theorem that states that the demand for a good is equal to the supply of the good.

A theorem that states that the marginal cost of production is equal to the marginal revenue.

A legal entitlement to own, use, and dispose of a particular asset.

A legal entitlement to receive a particular stream of income.

A legal entitlement to engage in a particular economic activity.

A legal entitlement to be free from interference by others.

Property rights promote economic efficiency by encouraging individuals and firms to invest in and use resources productively.

Property rights promote economic efficiency by preventing individuals and firms from engaging in externality-generating activities.

Property rights promote economic efficiency by facilitating the exchange of goods and services.

All of the above.

A situation in which a common resource is overused and depleted because individuals have an incentive to overuse it.

A situation in which a common resource is underused because individuals have an incentive to conserve it.

A situation in which a common resource is used efficiently because individuals have an incentive to cooperate with each other.

None of the above.

A game in which two players have an incentive to cooperate with each other, even though it would be better for both of them if they defected.

A game in which two players have an incentive to defect on each other, even though it would be better for both of them if they cooperated.

A game in which one player has an incentive to cooperate and the other player has an incentive to defect.

None of the above.

To define and enforce property rights.

To regulate economic activity to prevent externalities.

To provide public goods and services.

All of the above.

Positive economics is concerned with describing the world as it is, while normative economics is concerned with prescribing how the world should be.

Positive economics is concerned with predicting the behavior of individuals and firms, while normative economics is concerned with evaluating the desirability of different outcomes.

Positive economics is based on empirical evidence, while normative economics is based on value judgments.

All of the above.

To help judges understand the economic consequences of their decisions.

To help judges identify and evaluate the trade-offs involved in different legal rules.

To help judges promote economic efficiency through their decisions.

All of the above.

The difficulty of quantifying the economic consequences of legal rules.

The difficulty of identifying and evaluating the trade-offs involved in different legal rules.

The difficulty of predicting the behavior of individuals and firms in response to legal rules.

All of the above.

Because it can help judges make more informed decisions.

Because it can help judges promote economic efficiency.

Because it is required by law.

All of the above.

The potential for economic analysis to be used to justify unjust or unfair outcomes.

The potential for economic analysis to be used to promote the interests of the wealthy and powerful at the expense of the poor and vulnerable.

The potential for economic analysis to be used to justify policies that harm the environment.

All of the above.