Why does a rent ceiling create an inefficient and unfair outcome in the housing market?
What will be an ideal response?
A rent ceiling creates inefficiency because at the quantity of apartments that are rented, the marginal social benefit exceeds the marginal social cost. Rent ceilings are unfair under the "fair rules" approach because rent ceilings prevent voluntary transactions. Rent ceilings are unfair under the "fair results" approach because there is no assurance that apartments go to those with lower incomes. Indeed, rent ceilings lead to discrimination, which is perhaps the antithesis to fairness.
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Which of the following relationships is most likely to exhibit zero correlation?
A) The relationship between the amount received as unemployment benefits in China and the unemployment rate in Canada B) The relationship between education and income C) The relationship between income and savings D) The relationship between wind velocity and rotational speed of wind turbines
If average labor productivity increases while population and the number of employed workers remain constant, then output per person:
A. increases. B. decreases. C. may increase or decrease. D. remains constant.
The demand schedule for a good shows:
A. the specific quantity of the good that people are willing and able to sell at different prices. B. the positive relationship between the price and the quantity of the good. C. no relationship between the price and the quantity of the good. D. the specific quantity of the good that people are willing and able to buy at different prices.
Considering the balance sheet for all commercial banks in the U.S., the net worth of banks is:
A. about the same as total liabilities. B. just about the same as total assets. C. about 5 times the total assets. D. about 1/11 of total assets.