Question

Question 2: Professor Schmidt Professor Schmidt, a geologist, has agreed to purchase McDonald's farm for a price of $2,000 per acre, which corresponds to the price of good quality farmland in the vicinity. However, Schmidt, on the basis of his own geological studies, is convinced that McDonald's farm contains valuable mineral deposits, which make the property worth $25,000 per acre. Schmidt's true motive is discovered by McDonald before Schmidt takes possession, and McDonald refuses to hand over the property. Schmidt sues for breach of contract. McDonald defends on the ground that Schmidt had a duty to disclose the results of his studies. Questions A) Does this case involve favorable or unfavorable information? Explain B) Does this case involve information that is socially valuable or purely distributive? Explain C) Was the information acquired casually or deliberately? Explain. D) According to our economic principles, who should win? Explain.

Answer 1

A) This case involve a favourable info as the MccDonalds farm has valuable mineral deposits which are usefull to the government.

b) The information available is a socially valuable information which helps the state to increase its economic value.

c) The information acquired is casually acquired becuase they to dont know that they are having mineral deposits until the tests or conducted or they dont have any idea that there will be mineral deposits

d) Schmidt should win because he paid the amount according to the agreement and has legal rights to gain controll on the land.