Deck 14: Torts and Contracts

Question 1

Tort law deals with:

A) Contracts.
B) Real estate.
C) Criminal acts.
D) Civil litigation.
E) French pastry.

Answer 1

Civil litigation.

Question 2

_____ deals with an area of jurisprudence in which an act of commission or omission by one individual results in injury to another:

A) Criminal law.
B) Contract law.
C) Tort law.
D) Constitutional law.
E) Common law.

Answer 2

Tort law.

Question 3

Tort law is concerned with the:

A) Allocation of civil damages.
B) Penalty for criminal acts.
C) Interpretation of constitutional law.
D) Enforcement of tax laws.
E) Uniform commercial code.

Answer 3

Allocation of civil damages.

Question 4

Common law in the U.S. is created by:

A) State and federal legislatures.
B) The judiciary.
C) The executive branch of the federal government.
D) State governors.
E) The clergy.

Question 5

Liability refers to:

A) The failure to exercise the same care exercised by a reasonable person.
B) The failure to refrain from committing an act that a reasonable person would not.
C) The legal responsibility for an act of commission or omission.
D) A convicted criminals debt to society.
E) Answers a and b.

Question 6

Negligence refers to:

A) The failure to exercise the same care exercised by a reasonable person.
B) The failure to refrain from committing an act that a reasonable person would refrain from committing.
C) The legal responsibility for an act of commission or omission.
D) A convicted criminals debt to society.
E) Answers a and b.

Question 7

Common law is shaped by the legal principle:

A) Stare decisis.
B) Caveat emptor.
C) Post hoc ergo propter hoc.
D) Annuit coeptis.
E) Novus ordo seclorum.

Question 8

_____ is created largely by judges as a by-product of deciding cases is:

A) Tort law.
B) Common law.
C) Criminal law.
D) Contract law.
E) Stare decisis.

Question 9

Torts are:

A) Intentional.
B) The result of negligence.
C) Committed by a tortfeasor.
D) Answers a and b.
E) All of the above.

Question 10

-Consider the game depicted in Figure 14.1, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. This situation most likely represents which of the following tort law regimes?

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 11

-Consider the game depicted in Figure 14.1, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. The Nash equilibrium strategy profile for this game is:

A) {Diligent, Diligent}.
B) {Diligent, Negligent}.
C) {Negligent, Diligent}.
D) {Negligent, Negligent}.
E) Answers b and c are correct.

Question 12

-Consider the game depicted in Figure 14.2, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. This situation most likely represents which of the following tort law regimes?

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 13

-Consider the game depicted in Figure 14.2, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. The Nash equilibrium strategy profile for this game is:

A) {Diligent, Diligent}.
B) {Diligent, Negligent}.
C) {Negligent, Diligent}.
D) {Negligent, Negligent}.
E) Answers b and c are correct.

Question 14

-Consider the game depicted in Figure 14.3, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. This situation most likely represents which of the following tort law regimes?

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 15

-Consider the game depicted in Figure 14.3, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. The Nash equilibrium strategy profile for this game is:

A) {Diligent, Diligent}.
B) {Diligent, Negligent}.
C) {Negligent, Diligent}.
D) {Negligent, Negligent}.
E) Answers b and c are correct.

Question 16

-Consider the game depicted in Figure 14.4, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. This situation most likely represents which of the following tort law regimes?

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 17

-Consider the game depicted in Figure 14.4, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. The Nash equilibrium strategy profile for this game is:

A) {Diligent, Diligent}.
B) {Diligent, Negligent}.
C) {Negligent, Diligent}.
D) {Negligent, Negligent}.
E) Answers b and c are correct.

Question 18

-Consider Figure the game depicted in 14.5, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. This situation most likely represents which of the following tort law regimes?

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 19

-Consider the game depicted in Figure 14.5, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. The Nash equilibrium strategy profile for this game is:

A) {Negligent, Negligent}.
B) {Moderate, Diligent}.
C) {Negligent, Moderate}.
D) {Moderate, Moderate}.
E) {Diligent, Diligent}.

Question 20

s

-Consider the game depicted in Figure 14.6, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. This situation most likely represents which of the following tort law regimes?

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 21

s

-Consider the game depicted in Figure 14.6, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. The Nash equilibrium strategy profile for this game is:

A) {Negligent, Negligent}.
B) {Diligent, Negligent}.
C) {Negligent, Diligent}.
D) {Diligent, Diligent}.
E) Answers b and c are correct.

Question 22

-Consider the game depicted in Figure 14.7, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. This situation most likely represents which of the following tort law regimes?

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 23

-Consider the game depicted in Figure 14.7, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. The Nash equilibrium strategy profile for this game is:

A) {Negligent, Negligent}.
B) {Moderate, Diligent}.
C) {Negligent, Moderate}.
D) {Moderate, Moderate}.
E) {Diligent, Diligent}.

Question 24

-Consider the game depicted in Figure 14.8, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. This situation most likely represents which of the following tort law regimes?

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 25

-Consider the game depicted in Figure 14.8, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. The Nash equilibrium strategy profile for this game is:

A) {Negligent, Negligent}.
B) {Diligent, Negligent}.
C) {Negligent, Diligent}.
D) {Diligent, Diligent}.
E) Answers b and c are correct.

Question 26

-Consider the game depicted in Figure 14.9, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. This situation most likely represents which of the following tort law regimes?

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 27

-Consider the game depicted in Figure 14.9, which summarizes the payoffs to a tortfeasor and an injured person resulting from an act of negligence. The Nash equilibrium strategy profile for this game is:

A) {Negligent, Negligent}.
B) {Diligent, Negligent}.
C) {Negligent, Diligent}.
D) {Diligent, Diligent}.
E) Answers b and c are correct.

Question 28

-Consider the game depicted in Figure 14.10. If a motorist hits a pedestrian, the pedestrian incurs accident costs of $50. The cost of being diligent for both players is $5. If both players are diligent, the probability that an accident will occur is 5 percent. The payoffs from alternative strategy profiles suggest that the prevailing tort law regime is:

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 29

-Consider the game depicted in Figure 14.10. If a motorist hits a pedestrian, the pedestrian incurs accident costs of $50. The cost of being diligent for both players is $5. If both players are diligent, the probability that an accident will occur is 5 percent. The Nash equilibrium strategy profile for this game is:

A) {Negligent, Negligent}.
B) {Diligent, Negligent}.
C) {Negligent, Diligent}.
D) {Diligent, Diligent}.
E) Answers b and c are correct.

Question 30

-Consider the game depicted in Figure 14.11. If a motorist hits a pedestrian, the pedestrian incurs accident costs of $50. The cost of being diligent for both players is $5. If both players are diligent, the probability that an accident will occur is 5 percent. The payoffs from alternative strategy profiles suggest that the prevailing tort law regime is:

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 31

-Consider the game depicted in Figure 14.11. If a motorist hits a pedestrian, the pedestrian incurs accident costs of $50. The cost of being diligent for both players is $5. If both players are diligent, the probability that an accident will occur is 5 percent. The Nash equilibrium strategy profile for this game is:

A) {Negligent, Negligent}.
B) {Diligent, Negligent}.
C) {Negligent, Diligent}.
D) {Diligent, Diligent}.
E) Answers b and c are correct.

Question 32

-Consider the game depicted in Figure 14.12. If a motorist hits a pedestrian, the pedestrian incurs accident costs of $50. The cost of being diligent for both players is $5. If both players are diligent, the probability that an accident will occur is 5 percent. The payoffs from alternative strategy profiles suggest that the prevailing tort law regime is:

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 33

-Consider the game depicted in Figure 14.12. If a motorist hits a pedestrian, the pedestrian incurs accident costs of $50. The cost of being diligent for both players is $5. If both players are diligent, the probability that an accident will occur is 5 percent. The Nash equilibrium strategy profile for this game is:

A) {Negligent, Negligent}.
B) {Diligent, Negligent}.
C) {Negligent, Diligent}.
D) {Diligent, Diligent}.
E) Answers b and d are correct.

Question 34

-Consider the game depicted in Figure 14.13. in the text If a motorist hits a pedestrian, the pedestrian incurs accident costs of $50. The cost of being diligent for both players is $5. If both players are diligent, the probability that an accident will occur is 5 percent. The payoffs from alternative strategy profiles suggest that the prevailing tort law regime is:

A) No liability.
B) Pure strict liability.
C) Negligence with contributory negligence.
D) Strict liability with contributory negligence.
E) Comparative negligence.

Question 35

-Consider the game depicted in Figure 14.10. in the text If a motorist hits a pedestrian, the pedestrian incurs accident costs of $50. The cost of being diligent for both players is $5. If both players are diligent, the probability that an accident will occur is 5 percent. The Nash equilibrium strategy profile for this game is:

A) {Negligent, Negligent}.
B) {Diligent, Negligent}.
C) {Negligent, Diligent}.
D) {Diligent, Diligent}.
E) Answers b and c are correct.

Question 36

Suppose that the cost of avoiding an accident if a motorist and pedestrian adopts a diligent strategy is $2. If an accident occurs, the pedestrian incurs accident costs of $30. If both players adopt a negligent strategy, the probability of an accident is 0.1. If either player adopts a diligent strategy, there is 0.05 chance that an accident will occur. If both players adopt a diligent strategy, the probability that an accident will occur is 0.01. The Nash equilibrium strategy profile for a no-liability tort law regime is:

A) {Negligent, Negligent}.
B) {Negligent, Diligent}.
C) {Diligent, Negligent}.
D) {Diligent, Diligent}.
E) There is no unique Nash equilibrium.

Question 37

Suppose that the cost of avoiding an accident if a motorist and pedestrian adopts a diligent strategy is $2. If an accident occurs, the pedestrian incurs accident costs of $30. If both players adopt a negligent strategy, the probability of an accident is 0.1. If either player adopts a diligent strategy, there is 0.05 chance that an accident willoccur. If both players adopt a diligent strategy, the probability that an accident will occur is 0.01. The Nash equilibrium strategy profile for a pure-strict-liability tort law regime is:

A) {Negligent, Negligent}.
B) {Negligent, Diligent}.
C) {Diligent, Negligent}.
D) {Diligent, Diligent}.
E) There is no unique Nash equilibrium.

Question 38

Suppose that the cost of avoiding an accident if a motorist and pedestrian adopts a diligent strategy is $2. If an accident occurs, the pedestrian incurs accident costs of $30. If both players adopt a negligent strategy, the probability of an accident is 0.1. If either player adopts a diligent strategy, there is 0.05 chance that an accident will occur. If both players adopt a diligent strategy, the probability that an accident will occur is 0.01. The Nash equilibrium strategy profile for a negligence-with-contributory-negligence tort law regime is:

A) {Negligent, Negligent}.
B) {Negligent, Diligent}.
C) {Diligent, Negligent}.
D) {Diligent, Diligent}.
E) There is no unique Nash equilibrium.

Question 39

Suppose that the cost of avoiding an accident if a motorist and pedestrian adopts a diligent strategy is $2. If an accident occurs, the pedestrian incurs accident costs of $30. If both players adopt a negligent strategy, the probability of an accident is 0.1. If either player adopts a diligent strategy, there is 0.05 chance that an accident will occur. If both players adopt a diligent strategy, the probability that an accident will occur is 0.01. The Nash equilibrium strategy profile for a strict-liability-with-contributory-negligence tort law regime is:

A) {Negligent, Negligent}.
B) {Negligent, Diligent}.
C) {Diligent, Negligent}.
D) {Diligent, Diligent}.
E) There is no unique Nash equilibrium.

Question 40

Suppose that in the cost of avoiding an accident if a motorist and pedestrian adopt a diligent strategy is $10. If an accident occurs, the pedestrian incurs accident costs of $100. If both players adopt a negligent strategy, the probability of an accident is 0.40. If either player adopts a diligent strategy, there is 0.35 chance that an accident will occur. If both players adopt a diligent strategy, the probability that an accident will occur is 0.25. What is the Nash equilibrium strategy profile for a no-liability tort law regime?

A) {Negligent, Negligent}.
B) {Negligent, Diligent}.
C) {Diligent, Negligent}.
D) {Diligent, Diligent}.
E) There is no unique Nash equilibrium.

Question 41

Suppose that in the cost of avoiding an accident if a motorist and pedestrian adopt a diligent strategy is $10. If an accident occurs, the pedestrian incurs accident costs of $100. If both players adopt a negligent strategy, the probability of an accident is 0.40. If either player adopts a diligent strategy, there is 0.35 chance that an accident will occur. If both players adopt a diligent strategy, the probability that an accident will occur is 0.25. What is the Nash equilibrium strategy profile for a pure-strict-liability tort law regime?

A) {Negligent, Negligent}.
B) {Negligent, Diligent}.
C) {Diligent, Negligent}.
D) {Diligent, Diligent}.
E) There is no unique Nash equilibrium.

Question 42

Suppose that in the cost of avoiding an accident if a motorist and pedestrian adopt a diligent strategy is $10. If an accident occurs, the pedestrian incurs accident costs of $100. If both players adopt a negligent strategy, the probability of an accident is 0.40. If either player adopts a diligent strategy, there is 0.35 chance that an accident will occur. If both players adopt a diligent strategy, the probability that an accident will occur is 0.25. What is the Nash equilibrium strategy profile for a negligence-with-contributory- negligence tort law regime?

A) {Negligent, Negligent}.
B) {Negligent, Diligent}.
C) {Diligent, Negligent}.
D) {Diligent, Diligent}.
E) There is no unique Nash equilibrium.

Question 43

Suppose that in the cost of avoiding an accident if a motorist and pedestrian adopt a diligent strategy is $10. If an accident occurs, the pedestrian incurs accident costs of $100. If both players adopt a negligent strategy, the probability of an accident is 0.40. If either player adopts a diligent strategy, there is 0.35 chance that an accident will occur. If both players adopt a diligent strategy, the probability that an accident will occur is 0.25. What is the Nash equilibrium strategy profile for a strict-liability-with-contributory- negligence tort law regime?

A) {Negligent, Negligent}.
B) {Negligent, Diligent}.
C) {Diligent, Negligent}.
D) {Diligent, Diligent}.
E) There is no unique Nash equilibrium.

Question 44

A contract:
I. Is a written or oral agreement between two or more parties to render a service in exchange for something of value.
II. May be enforceable in the courts if a party fails to abide by some or all of its terms and conditions.
III. Is always a written and prepared by lawyers.
Which of the following is correct?

A) I only.
B) II only.
C) III only.
D) I and II only.
E) I, II, and III.

Question 45

A lender has to decide whether to extend a $100 loan in exchange for a promise by the borrower to repay the loan and 10 percent simple interest in one year. The borrower plans to invest the proceeds of the loan with a certain 11 percent rate of return. The lender believes there is a 95 percent chance that the loan will be repaid. If the lender moves first, the subgame perfect equilibrium for this game is:

A) {Lend 6 Repay}.
B) {Lend 6 Default}.
C) {Not lend}.
D) This is a dynamic game with incomplete information and does not have a unique subgame perfect equilibrium.