Geraldo Wants to Purchase Marlena's 1914 Prairie-Style House So He

Multiple Choice

Geraldo wants to purchase Marlena's 1914 prairie-style house so he can tear it down to build a 10,000 square foot home with space to operate his hypnotherapy practice. Marlena's great-grandfather built the 1914 house and she has no intention of selling it, especially to someone who wants to tear it down. The mayor, who is a friend and client of Geraldo, talks to Marlena and tells her that since Geraldo's proposed house would generate 20 times as much property tax for the city as Marlena's current house does, Marlena will need to either tear down the house herself and build a house comparable to the one Geraldo wants to build, or eminent domain will be used to force the sale of her house. In this case, the threat of eminent domain

A) is in the best interest of society in general.
B) would move a resource from someone who values it less to someone who values it more.
C) gives people incentives to make second-best choices.
D) would increase the size of the economic pie since property-tax revenues would increase.