Macroeconomics (7th Edition)
7th Edition
ISBN: 9780134738314
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 4, Problem 4.3.10PA
Sub part (a):
To determine
The impact of rent control on renters.
Sub part (b):
To determine
The impact of rent control through price ceiling by government.
Sub part (c):
To determine
The impact of rent control by government.
Sub part (d):
To determine
The impact when there is no rent control.
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Suppose the following graph shows the demand for, and supply of, apartments in New York City.
Use the black point (plus symbol) to indicate the equilibrium monthly rent and quantity of apartments in the absence of price controls. Then use the
green point (triangle symbol) to fill the area representing consumers' surplus, and use the purple point (diamond symbol) to fill the area representing
producers' surplus.
MONTHLY RENT (Dollars per apartment)
2800
2600
2400
2200
2000
1800
0
Demand
Supply
0.8
3.2
QUANTITY OF APARTMENTS (Millions per month)
1.6
2.4
4.0
Equilibrium
A
CS
PS
?
The competitive equilibrium rent in the city of Mumbai is currently 20,000 per month.The government decides to enact rent control and to establish a price ceiling forapartments of 15,000 per month. Briefly explain whether rent control is likely to makeeach of the following people better or worse off:a. Someone currently renting an apartment in Mumbai.b. Someone who will be moving to Mumbai next year and who intends to rent anapartmentc. A landlord who intends to abide by the rent control law
d. A landlord who intends to ignore the law and illegally charge the highest rent possiblefor his apartments
3. The following is quoted from Global News "British Columbians could be fined $230 for not wearing a mask in indoor, public spaces" by Richard Zussman on November 24, 2020. "Provincial health officer Dr. Bonnie Henry was reluctant to put in a mandatory mask policy but decided to support the policy after concerns were raised by businesses about enforcing a mask requirement." Many people would not wear masks in public indoor spaces before the mandatory mask policy was enforced. What kind of market failure do you think exist in this case? How does the $230 fine help address this market failure?
Chapter 4 Solutions
Macroeconomics (7th Edition)
Ch. 4.A - Prob. 1RQCh. 4.A - Prob. 2RQCh. 4.A - Prob. 3RQCh. 4.A - Why would economists use the term deadweight loss...Ch. 4.A - Prob. 5PACh. 4.A - Prob. 6PACh. 4.A - Prob. 7PACh. 4.A - Prob. 8PACh. 4.A - Prob. 9PACh. 4 - Prob. 1TC
Ch. 4 - Prob. 2TCCh. 4 - Prob. 4.1.1RQCh. 4 - Prob. 4.1.2RQCh. 4 - Prob. 4.1.3RQCh. 4 - Prob. 4.1.4RQCh. 4 - Prob. 4.1.5PACh. 4 - Prob. 4.1.6PACh. 4 - Prob. 4.1.7PACh. 4 - Prob. 4.1.8PACh. 4 - Prob. 4.1.9PACh. 4 - Prob. 4.1.10PACh. 4 - Prob. 4.1.11PACh. 4 - Prob. 4.1.12PACh. 4 - Prob. 4.1.13PACh. 4 - Prob. 4.1.14PACh. 4 - Prob. 4.2.1RQCh. 4 - What is economic efficiency? Why do economists...Ch. 4 - Prob. 4.2.3PACh. 4 - Prob. 4.2.4PACh. 4 - Prob. 4.2.5PACh. 4 - Prob. 4.2.6PACh. 4 - Prob. 4.2.7PACh. 4 - Prob. 4.2.8PACh. 4 - Prob. 4.2.9PACh. 4 - Prob. 4.2.10PACh. 4 - Prob. 4.3.1RQCh. 4 - Prob. 4.3.2RQCh. 4 - Prob. 4.3.3RQCh. 4 - Prob. 4.3.4RQCh. 4 - Prob. 4.3.5PACh. 4 - Prob. 4.3.6PACh. 4 - Prob. 4.3.7PACh. 4 - Prob. 4.3.8PACh. 4 - Prob. 4.3.9PACh. 4 - Prob. 4.3.10PACh. 4 - Prob. 4.3.11PACh. 4 - Prob. 4.3.12PACh. 4 - Prob. 4.3.13PACh. 4 - Prob. 4.3.14PACh. 4 - Prob. 4.3.15PACh. 4 - Prob. 4.3.16PACh. 4 - Prob. 4.3.17PACh. 4 - Prob. 4.3.18PACh. 4 - Prob. 4.3.19PACh. 4 - Prob. 4.4.1RQCh. 4 - Prob. 4.4.2RQCh. 4 - Prob. 4.4.3RQCh. 4 - Prob. 4.4.4RQCh. 4 - Prob. 4.4.5PACh. 4 - Prob. 4.4.6PACh. 4 - Prob. 4.4.7PACh. 4 - Prob. 4.4.8PACh. 4 - Prob. 4.4.9PACh. 4 - Prob. 4.4.10PACh. 4 - Prob. 4.2CTE
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