What are the effects of a rent ceiling set below the equilibrium rent?
What will be an ideal response?
A rent ceiling is the maximum legal rent. If the rent ceiling is set below the equilibrium rent, the rent ceiling creates a shortage of apartments. Consumer and producer surplus are both reduced. Hopeful renters face must engage in increased search activity. In order to rent an apartment, renters and landlords might engage in black market activity that effectively raises the rent.
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Labor expenditures associated with carrying out an abatement process are considered to be part of
a. capital costs b. fixed costs c. operating costs d. implicit costs e. none of the above
Based on the figure below, an economy in short-run equilibrium at point A has a(n) ________ gap. The gap could be eliminated by the self-correcting mechanism of the economy and eventually achieve long-run equilibrium at point ________ or the central bank could intervene with monetary easing and the long-run equilibrium would be at point ________. 
A. expansionary; C; B B. recessionary; B; C C. expansionary; B; C D. recessionary; C; B
Suppose a restaurant that is highly profitable during the summer months is unable to cover its total cost during the winter months. If it wants to maximize profits, the restaurant should
a. shut down during the winter, even if it is able to cover its variable costs during that period. b. continue operating during the winter months if it is able to cover its variable costs. c. go a out of business immediately; losses should never be tolerated. d. lower its prices during the summer months.
Which of the following is the best example of a buyer indicating his or her wants in the marketplace?
a. Ariel posts product reviews on social media sites. b. Javier answers a marketing survey. c. Qing avoids buying a certain high-priced product. d. Lola enrolls in a rewards program.