Econ 5.4

24 November 2023

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8 test answers

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question

To affect the market outcome, a price ceiling

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must be set below the equilibrium price.

question

In order to be binding, a price ceiling

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must lie below the free market equilibrium price.

question

Rent control is an example of a price ceiling.

answer

True

question

With an increase in the demand for a good, if prices are not allowed to increase:

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there will be no incentive for firms to increase the quantity supplied of the good.

question

In a city with rent-controlled apartments, all of the following are true except

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landlords have an incentive to rent more apartments than they would without rent control.

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Rent control is an example of

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a price ceiling.

question

A price ceiling is a legally determined maximum price that sellers may charge.

answer

True

question

In New York City, about 1 million apartments are subject to rent control by the local government. Rent control

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puts a legal limit on the rent that landlords can charge for an apartment.