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Under the Texas Law Known as "Rule of Capture," Land

Question 40

Multiple Choice

Under the Texas law known as "rule of capture," land owners "get to pump as much of the water under it as they want. . .. 'This means whoever sucks it out first, it's their water'-even if that means there isn't enough left for others." Under this law, pumping large amounts of water:


A) imposes a negative externality on others.
B) imposes a positive externality on others.
C) imposes the free rider effect on others.
D) is a private decision with no effects on others.

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