Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because
a. with rent control, the government guarantees landlords a minimum level of profit.
b. they become resigned to the fact that many of their apartments are going to be vacant at any given time.
c. with shortages and waiting lists, they have no incentive to maintain and improve their property.
d. with rent control, it becomes the government's responsibility to maintain rental housing.
c
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A town wants to build a new bridge. Construction firms will submit sealed bids
The town will award the contract to the firm that submits the lowest bid and will pay the firm the amount of the second lowest bid (that is, the town will conduct a second-price procurement auction). So, for example, if Firm A bids $8 million, Firm B bids $9 million, and Firm C bids $10 million then the city will award the contract to Firm A (it submitted the lowest bid) and pay Firm A $9 million (the amount of the second lowest bid). Suppose your firm is willing to build the bridge for a minimum of $9 million. a. Show that bidding $9 million is a better strategy than bidding some amount below $9 million— say, $7 million. b. Show that bidding $9 million is a better strategy than bidding some amount above $9 million—say, $11 million.
If the normalization of trade relations between the U.S. and Cuba legalizes the sale of Cuban cigars in our country, it would
A. increase equilibrium price and decrease equilibrium quantity for Cuban cigars. B. decrease equilibrium price and increase equilibrium quantity for Cuban cigars. C. increase both the equilibrium price and quantity for Cuban cigars. D. decrease both the equilibrium price and quantity for Cuban cigars.
Expansionary fiscal policy can be used to reduce cyclical unemployment by
A. increasing aggregate demand so as to raise real Gross Domestic Product (GDP). B. increasing long-run aggregate supply so as to raise real Gross Domestic Product (GDP). C. eliminating inefficiencies from labor markets. D. raising nominal wages so as to encourage workers to work more hours.
When the Federal Reserve Banks decide to buy government bonds from banks and the public, the supply of reserves in the Federal funds market:
A. Increases and the Federal funds rate decreases B. Increases and the Federal funds rate increases C. Decreases and the Federal funds rate decreases D. Decreases and the Federal funds rate increases