Rent controls can cause
a. a decline in the quality of housing available for rent
b. the development of a black market to allocate apartments to renters.
c. longer search times for renters attempting to locate an apartment.
d. all of these are possible results of rent controls.
d
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A monopolistically competitive firm earning profits in the short run will find the demand for its product decreasing and becoming more elastic in the long run as new firms move into the industry until
A) the original firm is driven into bankruptcy. B) the firm's demand curve is perfectly elastic. C) the firm exits the market. D) the firm's demand curve is tangent to its average total cost curve.
In the Friedman-Lucas money surprise model, a surprise increase in money supply growth
A) has no effect on inflation. B) increases inflation less than in proportion to the growth rate of the money supply. C) increases inflation in an equal proportion to the growth rate of the money supply. D) increases inflation more than in proportion to the growth rate of the money supply.
When a perfectly competitive firm experiences zero economic profits
A) the high barriers to entry prevent further competition. B) existing firms exit the industry. C) additional firms enter the industry. D) firms have no incentive to exit or enter the industry.
Why are externalities associated with common property rather than private property?
What will be an ideal response?