Scrooge's Property Contains a Restrictive Covenant That Allows Only Residential

question 37

Multiple Choice

Scrooge's property contains a restrictive covenant that allows only residential use of the land to his inheritors.Over the years,all the adjoining areas of land have become industrial areas.Scrooge's great-grandson,the present owner of his land,wants to set up a small manufacturing unit there.Will he be able to do so?

• A)Yes,since he is the present owner.
• B)Yes,because the circumstances have changed completely.
• C)No,the restrictive covenant is completely binding.
• D)No,there cannot be a waiver because Scrooge is dead.

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Definitions:

Subsidy

A financial contribution provided by government to reduce the cost of producing goods or services and support businesses or consumers.

External Costs

Costs of an economic activity that are not borne by the parties directly involved in the transaction but by other individuals or society at large.

Supply Curve

A graph that represents the relationship between the price of a good and the quantity of the good that suppliers are willing to offer for sale.

Socially Optimal

A condition that maximizes societal welfare, often referring to the optimal distribution of resources and goods.