1 (a) Explain why and under what circumstances disclosure terms in contracts are Pareto optimal? (b) Should a law be passed forcing disclosure on all parties to contracts? (c) To what extent does the prisoners' dilemma apply to levels of efficient production of valuable information? (d) For the party having the information, is the cost of acquiring it relevant to whether it should be disclosed by them? Explain why? Q2 In most rent-controlled markets, a new tenant pays the same rent-controlled amount as the previous tenant. In Ontario, a landlord may charge the new tenant market rent provided that the new rent becomes rent controlled at the new level for the remainder of the new lease. (a) Is the Ontario system more efficient? Why? (b) What can go wrong in the Ontario system where there is a high turnover of tenants? (c) What happens if the new market rent falls below the rent-controlled amount the previous tenant was paying? Q3 If the value of a lost object is low enough, the rule "Finders keepers" applies and the finder has no legal obligation to advertise. This changes if the value increases. Discuss the costs that need to be balanced for the most efficient lower bound in the value of a lost object