In his 1960 article, ”The Problem of Social Cost,” Ronald Coase
uses an example of a rancher and a wheat farmer. The problem comes
from the rancher’s cows crossing over onto the farmer’s fields and
trampling his crop. For the next problems assume the damage to the
farmer’s crops is $1,000 a year and the cost of putting
up/maintaining a fence is $1,500 a year.
1. The farmer takes the rancher to court and the judge decides
putting up a...