A Creditor Has a Secured Interest in Your Artwork and an Artist

question 50

Multiple Choice

A creditor has a secured interest in your artwork and an artist has a lien on your artwork. Who has priority in obtaining the artwork or the proceeds from the sale of the artwork?

• A) The creditor with a perfected secured interest will have priority over the artist.
• B) The creditor with an unperfected secured interest will have priority over the artist.
• C) The artist will always have priority over the creditor.
• D) The creditor will always have priority over the artist.
• E) The property must be sold and the artist and creditor must split the proceeds 50-50.

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Definitions:

Marginal Social Cost

The complete expense incurred by society for the production of one more unit of a product or service.

Public Park

A piece of public land in urban areas designated for recreational use by the general public, often maintained by local government.

Socially Optimum

A state where resources are allocated in the most efficient way from a societal perspective, maximizing social welfare.

Positive Externality

A benefit that affects a party who did not choose to incur that benefit, often discussed in the context of public goods and services.