ESSENTIALS OF ECONOMICS
11th Edition
ISBN: 9781260225334
Author: SCHILLER
Publisher: RENT MCG
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Question
Chapter 3, Problem 8QFD
To determine
The reason why cities impose rent controls and the way to solve the problems of poor people related to housing.
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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.
Since price ceiling regulations result in chronic shortages, what recommendations do you have for solving the housing crises in big cities? Instead of government imposing price control on rent, what can society do to handle this problem?
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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- How are rent controls likely to affect the market for housing in a city? Create a graph illustrating the market for apartments without rent controls to help with your answer. What does it mean, in terms of this market for the rent control to be effective? Would you recommend such a policy?arrow_forwardCity A and City B are on the opposite sides of the River. Suppose A imposes rent controls. With the use of diagrams explain what effect these controls will have upon the housing markets in A and B City?arrow_forwardThe equilibrium price in the housing market is very high. What will happen if the government imposes a very high price ceiling that is below but very close to the equilibrium price on the housing market? How does that affect the poor and the market for housing? Are there any loses or gains?arrow_forward
- Question 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.arrow_forwardWhat is the difference between the primary market and thesecondary market?arrow_forwardJames lives in a rent controlled apartment and has for the past few weeks been trying to get the supervisor to fix his shower.what does waiting to get ones shower fixed have to do with rent controlled apartment?arrow_forward
- Suppose the California legislature passed a sweeping law to DECREASING the parking requirements and setback requirements. Suppose there is a housing tax. What is the effect of this law on the PES for housing? What effect would this law have on the tax burden for buyers?arrow_forwardSuppose Raleigh decides to adopt rent controls that end up reducing the rates landlords can charge below equilibrium rates. Which of the following is a likely consequence? Select one: A.Some landlords will convert rental housing units to other uses, thereby reducing the number of rental housing units available B.At lower rents, more NC State students will prefer living off campus as opposed to living in a dorm C.There will be a shortage of rental units in Raleigh D.All of the these answers are correctarrow_forwardCould you please provide an example (article) of the Toronto housing market and explain in economic terms why supply and demand are in this situation?arrow_forward
- 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 controlsarrow_forwardMany cities have experienced a substantial decrease in the amount of garbage being collected after they changed from levying a flat tax on each household to a system where the homeowner is charged a fee for each bag or can picked up. Would this have been the result of a change in demand or a change in the quantity demanded? Would you recommend the flat fee or the fee per bag? Why?arrow_forward
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