1. Assume that the following table describes the relation between how much effort a dog owner must exert to prevent that dog from hurting neighbor pets and property, and the expected amount of harm on average.

a. What is the efficient amount of prevention effort?

b. Under an efficient strict liability regime, how much in damages should the dog owner expect to pay on average?

c. Under an efficient negligence regime, what is the largest effort that would still make the dog owner legally liable to pay damages?

Expected Harm

100

50

33

20

12

8

5

3

1

Prevention Effort

0

5

10

15

20

25

30

35

40