Do rent ceilings result in any deadweight loss?
What will be an ideal response?
Yes. Because the number of apartments rented is decreased, some consumer surplus is lost and some producer surplus is lost. Part of these loses are gained by the tenants in the form of reduced rental payments. But the sum of the losses not gained by the tenants is the deadweight loss.
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Assume a competitive market is in equilibrium. There is an increase in demand, but no change in supply. As a result, the equilibrium price ________, and the equilibrium quantity ________
A) rises; increases B) falls; increases C) falls; decreases D) falls; does not change E) rises; does not change
The public policies designed to mitigate the effects of monopolies are:
A. highly debated issues. B. well-defined and accepted. C. highly effective. D. proven to increase benefits more than increase costs.
Suppose there is an increase in the supply of a good. Which of the following statements is true?
A. The closer the demand curve is to being vertical, the larger the decrease in equilibrium price, and the smaller the increase in equilibrium quantity. B. The closer the demand curve is to being horizontal, the larger the decrease in equilibrium price, and the smaller the increase in equilibrium quantity. C. The closer the demand curve is to being vertical, the smaller the decrease in equilibrium price, and the larger the increase in equilibrium quantity. D. The closer the demand curve is to being vertical, the larger the increase in equilibrium price, and the smaller the decrease in equilibrium quantity.
At macro equilibrium:
A. Exports equal imports. B. Money supply equals money demand. C. Population growth is stable. D. Aggregate demand equals aggregate supply.