Assuming normal demand and supply relationships, show how income transfers to consumers and subsidies to producers of housing could be used to alleviate the harmful effects of rent controls.
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- Assuming normal
demand and supply relationships, show how income transfers to consumers and subsidies to producers of housing could be used to alleviate the harmful effects of rent controls.
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- To protect the well-being of the tenants, some legislators in Hong Kong suggest imposing a rent control. Explain the effects of a rent control on the market for rental housing, changes in the behavior of the landlords as a result of, and explain why these imply inefficiency.In an unregulated, competitive market we could calculate consumer surplus if we knew the equations representing supply and demand. For this problem assume that supply and demand are as follows: Supply P = 4 + 0.116Q Demand P = 25 - 0.10Q where P represents unit price in dollars and Q represents the number of units sold each year. Calculate the annual value of aggregate consumer surplus."New York City has a long-standing policy of control-ling rents in certain parts of the city—in essence, a price ceiling on rent. Is the market for apartments likely to be efficient or inefficient? What does this imply for the size of total surplus?"
- No Plagirism Please! Price controls on rents are frequently implemented by governments in an effort to protect renters from high housing prices. Differentiate the type of price control used from other potential price controls, and then formulate reasons as to why governments should be careful when implementing these types of controlsQuestion 13.13. Which of the following is a consequence of rent controls established to keep housing affordable for the poor? Less rental housing is available as prospective landlords find it unprofitable to rent at restricted prices. The quality of rental housing declines as landlords lack the funds and incentive to maintain properties. Apartment buildings are torn down in favor of office buildings, shopping malls, and other buildings where rents are not controlled. All of the above are consequences of rent controls.The market demand and supply for renting apartments in the Midrand area is given as: Demand: p = 12 000 - 5Qd Supply: p = 800 + 3Qs 5. What is the landlord’s total revenue at the equilibrium price? [1] R7 000 000.[2] R12 000 000.[3] R8 000 000.[4] R1 400 000. 6. If the government implements an effective rent ceiling of R4 100 in the Midrand area, what are the search costs? [1] R0.[2] 2 640 000.[3] 1 320 000.[4] 72 000. 7. What price will the customers be willing to pay on the black market? [1] R5 000.[2] R4 100.[3] R6 500.[4] R1 400.
- Discuss the economic rationale and two major consequences of a price ceiling on a product in a mixed economy .When rent controls are imposed, the quantity demanded of apartments will be: a) less than the equilibrium quantity, and rents will be less than the equilibrium rents b) less than the equilibrium quantity, and rents will be greater than the equilibrium rents c) greater than the equilibrium quantity, and rents will be less than the equilibrium rents d) greater than the equilibrium quantity, and rents will be greater than the equilibrium rentsQuestion #3. Assume that crop rent gradients for three different crops are a function of crop type and soil fertility. The rent gradient for broccoli is -.02r+3. The rent gradient for spinach is -.005r+2 and the rent gradient for wheat is -.00167r+1. Given a farm with 600 acres, how many acres would be planted with each crop? How would this change if the government decides to subsidize spinach production by $0.50—shifting the curve out by $0.50?
- The goal of rent control is to facilitate controlled economic experiments in urban areas. help the poor by assuring them an adequate supply of apartments. help the poor by making housing more affordable. help landlords by assuring them a low vacancy rate for their apartments.Given the following supply and demand functions: Qdx = 1,600 - 6 Px + 0.5 Py-0.5 Pz+ 0.005 1 Qsx = 550 + 14 PX-6 W -0.5 R Income (1) = 4,200 Price of Y (Py) = 130 Price of Z (PZ) = 60 Wages (W) = 16 Rent (R) = 130 1. What is the equilibrium price? Number 2. What is the equilibrium quantity? Number In reduced form the demand is Qdx = Do - b (Px) 3. What is the horizontal intercept value, 'Do'? Number 4: What is the value of 'b'? (use a negative sign in your answer) Number In reduced form the supply is Qsx = f(Px); Qsx = So + g (Px) Part 5: What is the horizontal intercept, 'So'? Number Part 6: What is the value of 'g'? NumberWhich is not an example of rent‑seeking behavior? excessive spending on a corporate jet for executives incurring $30 million$30 million in legal fees to defend against antitrust regulations fighting for tariffs on imported goods within the same industry $25 million$25 million spent lobbying Congress
