1.The local government has set a maximum price on city rents that is above the equilibrium...
1.The local government has set a maximum price on city rents that is above the equilibrium rent. Now there is an increase in the demand for apartments. What would we expect to see?
A. An increase in the price of apartments
B. A decrease in the price of apartments
C. A decrease in the quantity of apartments rented
D. A shortage of apartments
2.Government action can have a direct effect all except which of the following?
A. Price ceilings
B. Price floors
C. Taxes
D. Efficiency
3.Both ethanol and chicken feed use corn as an ingredient. As ethanol production increased, the demand for corn increased. As a result, which of the following occurred?
A. The price of chicken feed increased, and the supply of chicken increased.
B. The price of chicken feed increased, and the supply of chicken decreased
C. The price of chicken feed decreased, and the supply of chicken increased.
D. The price of chicken feed decreased, and the supply of chicken decreased.
Homework Answers
(1) (A)
Since maximum (ceiling) price is set above equilibrium price, the ceiling is not binding and will not affect original equilibrium. Stating from original equilibrium, an increase in demand will shift demand curve to right, increasing price and quantity.
(2) (D)
Inefficiency arises out of indirect effect of government intervention.
(3) (B)
Higher demand for corn increases the price of corn, raising the input price for chicken feed. So price of chicken feed will increase. Since chicken feed is an input to production of chicken, higher input price will decrease the supply of chicken.
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1.The local government has set a maximum price on city rents
that is above the equilibrium...
18 Suppose that the demand and supply schedules for rental apartments in the city of Gotham...
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Questions 5-9 PLEASE!
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19
Suppose that the demand and supply schedules for rental apartments in the city of Gotham are as given in the table below. Apartments Demanded Apartments Supplied Monthly Rent 2,500 2,000 1,500 1,000 500 12,500 15,000 17,500 20,000 22,500 17,500 15,000 12,500 10,000 7,500 b. If the local government can enforce a rent-control law that sets the maximum monthly rent at $1,500, will there be a surplus or a shortage? (Click to select) Surplus Shortage Of how many units? apartments...
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If a price ceiling is imposed below equiibrium in the market for apartments: a. it results in a surplus of rental units in the near future. b. it acts as an incentive to landlords to invest more money in their property to attract more tenants c. it results in many rental units being poorly maintained. d. it reduces the amount of housing discrimination against minorities. it reduces the resulting shortage by allowing further pice reducins 23. Ifthe minimum wage for...
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