Figure 4-3
indicates the demand (D) and supply (S) for the rental housing market in a large city. If the government imposed a price ceiling of a, which of the following would be true?
a.
The quantity of rental housing demanded would be t.
b.
The quantity of rental housing supplied would be r.
c.
There would be a shortage of rental housing.
d.
All of the above are true.
d
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In the case of a nonexcludable public good, the market will fail to produce the good because of the free rider problem.
Answer the following statement true (T) or false (F)
Your neighbor has just planted some fragrant flowers. The wonderful scent drifts into your room and makes you happy
A) This scent is an internal cost to you. B) This cannot be an externality since you are enjoying the scent. C) This is an externality since you get a benefit from your neighbor's flowers. D) The social cost of this activity is entirely borne by you neighbor.
The ingredients that go into making any good or service are called the:
A. factors of output. B. factors of production. C. output makers. D. production ingredients.
During recessions, government spending usually
A. decrease because unemployment payments increase. B. decreases because unemployment payments decrease. C. increases because unemployment payments decrease. D. increases because unemployment payments increase.