Scenario 10-2 the Demand Curve for Restored Historic Buildings Slopes Downward and Downward

question 543

Essay

Scenario 10-2
The demand curve for restored historic buildings slopes downward and the supply curve for restored historic buildings slopes upward. The production of the 50^th restored historic building entails the following:
• a private cost of $800,000;
• a private value of $650,000;
• a social value of $800,000.
-Refer to Scenario 10-2. Is there an external cost associated with the restoration of the 50^th historic building, or is there an external benefit? What is the amount of that external cost or external benefit?

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Definitions:

Temporary Dipole

A temporary dipole occurs when there is a short-lived imbalance of electron density within a molecule, causing a temporary separation of charges.

Intermolecular Force

The forces of attraction or repulsion which act between neighboring particles (atoms, molecules, or ions).

Dispersion Forces

Weak forces resulting from temporary polarization of molecules due to the movement of electrons, also known as London dispersion forces.

Van Der Waals

Weak forces of attraction between molecules, named after Dutch physicist Johannes Diderik van der Waals, significant in the properties of gases and liquids.