Assuming that the rent ceiling is strictly enforced so that there is no black market, which of the following statements about a housing market with a rent ceiling set below the equilibrium rent is correct?
A) The rent for housing equals the ceiling rent or higher.
B) There is excess supply of housing.
C) The rent ceiling increases the amount of producers' surplus.
D) The rent ceiling creates a deadweight loss.
E) The rent ceiling enforces efficiency upon the housing market.
D
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A lottery promises a $250,000 prize. But the prize money is paid out in $50,000 annual installments with the first installment received today. The winner is offered the option of an immediate lump-sum payment. If the interest rate remains at 10 percent for the entire period, what is the smallest amount the winner should accept?
A. $189,540 B. $192,970 C. $208,494 D. $225,000
Farmer Jones knows that the marginal cost to produce a bushel of tomatoes is $5 per bushel. He also knows that a consumer is willing to pay a maximum of $9 for the bushel. The price of the bushel is $6 and Farmer Jones sells his bushel for $6
On this bushel, Farmer Jones earns a producer surplus equal to A) $1. B) $3. C) $5. D) $6.
The government tries to protect the competitive economic system by passing and enforcing
A) price controls. B) tariff legislation. C) antitrust laws. D) building codes and zoning laws.
In Japan, the market value of the land is approximately four times that of all the land in the United States, even though Japan is only about the size of California. The most likely explanation for this fact is
a. greater demand for land in Japan relative to the supply than in the United States. b. land is very productive in Japan. c. land is not fixed in supply in the United States. d. Japanese workers are very productive.