In the housing market, if a rent ceiling of $600.00 is imposed when the equilibrium rent is $500.00, why will nothing change?
What will be an ideal response?
A rent ceiling is the maximum legal rent. Generally, the government imposes the ceiling when the equilibrium rent is considered too high. If, however, the rent ceiling ($600.00 ) is above the equilibrium rent ($500.00 ), people are already paying a rent lower than legal maximum. As a result, nothing changes and so this price ceiling is ineffective.
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In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that
a. OPEC raised the price of crude oil in world markets. b. U.S. gasoline producers raised the price of gasoline. c. the U.S. government maintained a price ceiling on gasoline. d. Americans typically commuted long distances.
If the unemployment rate rises, which policies would both be appropriate to reduce it?
a. increase taxes, increase government spending b. increase taxes, decrease government spending c. decrease taxes, increase government spending d. decrease taxes, decrease government spending
Adverse selection is a problem that arises:
A. before the parties have entered into an agreement. B. after the parties have voluntarily entered into an agreement. C. either before or after the parties have entered into an agreement. D. rarely in any market.
Which of the following acts required that financial derivatives be traded in established, regulated markets?
a. Glass-Steagall Banking Act b. Gramm-Leach-Bliley Financial Services Modernization Act c. Dodd-Frank Wall Street Reform and Consumer Protection Act d. Celler-Kefauver Financial Reform Act