"The market has failed to provide enough rental housing in New York City. This demonstrates another failure of free markets-they may lead to shortages of necessities." Explain why you agree or disagree
An economist would disagree. The free market leads to equilibrium, at which quantity demanded equals quantity supplied. There are neither shortages nor surpluses at the equilibrium point. The NYC shortage of rental housing is a result of rent ceilings, which interfere with the ability of the market to allocate scarce resources.
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Refer to the production possibility graph above. Assume that the economy is in equilibrium at point e. If there is an increase in the wage rate, the new equilibrium is most likely to be
A) point e. B) point d. C) point f. D) point h. E) point b.
When both internal and external costs for using a scarce resource are included, then there is
A) an increase in the production of the good. B) a negative externality. C) an increase in the price of the good. D) a positive externality.
Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Which of the following statements is true?
A. The United States has a comparative advantage in the production of shoes. B. Canada has a comparative advantage in the production of shoes. C. Comparative advantage doesn't exist in this scenario. D. Both countries have a comparative advantage in the production of shoes.
Which of the following were discovered in a Federal Trade Commission Study of 8,000 new and used Corvettes sold on eBay between 2001 and 2003?
a. The last-minute bids on new Corvettes were higher than that on used ones. b. The median winning bid on new Corvettes exceeded that on used ones. c. The median winning bid on used Corvettes exceeded that on new ones. d. The last-minute bids on used Corvettes were higher than that on new ones.