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

question 328

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. Could the government impose a tax or provide a subsidy to move the market to the social optimum? If your answer is "Yes," should it be a tax or should it be a subsidy?

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Definitions:

Communicating Information

The process of exchanging or transmitting data, ideas, thoughts, or feelings between individuals or groups via verbal or non-verbal means.

Spatial Rotation

The ability to mentally rotate three-dimensional figures accurately.

Prototypes

Original forms or models on which other objects, processes, or concepts are based or derived.

Classifying Objects

The cognitive process of organizing objects into categories based on shared characteristics or criteria.