Rent control is usually justified on the grounds that it protects moderate- to low-income families from the burden of rapidly rising rents and from eviction if they are unable to pay. It also prevents landlords from reaping windfalls as property values rise. Opponents note that rent controls usually lead to a reduced supply of rental housing and shortages. The proponents of rent controls support
them primarily on the grounds of
a. efficiency.
b. equality.
c. externalities.
d. cost disease of services.
b
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The Cournot model specifies how two firms in an oligopoly compete in terms of quantity. Briefly describe how the outcome of Cournot oligopoly competition relates to the outcomes of perfect competition and monopoly in terms of output and market efficiency/inefficiency. Can you be more precise about the relation between Cournot, monopoly, and perfectly competitive outputs if you know that demand is linear and marginal costs are constant? Explain.
What will be an ideal response?
The higher the bid in a first-price sealed-bid auction, the ________ the chances of winning and the ________ the surplus earned
A) higher; higher B) higher; lower C) lower; higher D) lower; lower
A firm that must determine the price-output combination that maximizes profit because it faces a downward-sloped demand curve
A) has a perfectly elastic demand curve. B) has a perfectly inelastic demand curve. C) is a price-taker. D) is a price searcher.
A consumer's budget constraint is drawn with the quantity of pizza measured along the horizontal axis and the price of Pepsi measured along the vertical axis. If the market is offering the consumer the trade-off of 3 pints of Pepsi for 1 pizza, then what is the slope of the consumer's budget constraint?