1. Graph the market for apartment units that has a binding price ceiling (rent control) and...

1. Graph the market for apartment units that has a binding price ceiling (rent control) and a consumer subsidy.

2. Graph the market for tobacco that has both a consumer tax, and a producer subsidy.

For each, always indicate any surplus or shortage, and under- or over-allocation.

Expert Solution

Here i am providing you the answer of the first question.

So finally the consumer surplus would increase, producer surplus would reduce, total surplus would also reduce amd there would be under allocation of resources leading to deadweight loss.

Rahul Sunny answered 1 year ago

Draw a graph that shows the apartment market in equilibrium with a binding rent ceiling. Label...

Draw a graph that shows the apartment market in equilibrium with a binding rent ceiling. Label equilibrium price, equilibrium quantity, rent ceiling, consumer surplus, producer surplus, and deadweight loss on the graph.

1) Explain why rent control is an example of a price ceiling. 2) Explain why price...

1) Explain why rent control is an example of a price ceiling. 2) Explain why price ceilings can lead to shortages in terms of supply and demand. 3) Explain the concept of consumer surplus and producer surplus. What effect does rent control have on consumer surplus and producer surplus? 4) Are you an opponent or proponent of rent control? Provide reasons for your stance.

1. Which of the following statements is false about a binding price ceiling? -A binding price...

1. Which of the following statements is false about a binding price ceiling? -A binding price ceiling will lower the price of a good -A binding price ceiling will always increase surplus for all consumers. -A binding price ceiling leads to a shortage of goods -A binding price ceiling can create deadweight loss 2. Which of the following is the explicit cost? -Interest foregone on the capital invested in business -Interest received on an investment -Interest paid on loan taken...

Rent control is an example of a price ceiling. Price ceilings keep prices low for consumers....

Rent control is an example of a price ceiling. Price ceilings keep prices low for consumers. We can clearly see that sellers (landlords in this case) are worse off. Consider if there is an argument to be made that consumers are worse off, too. a) After watching the Seinfeld video clip, discuss how some consumers are made better off and some are not in a rent-control situation. b) What kinds of rationing mechanisms would develop to help allocate the few...

1. What is a ‘price ceiling,’ exactly? 2. What is ‘pure’ rent control, in theory? 3....

1. What is a ‘price ceiling,’ exactly? 2. What is ‘pure’ rent control, in theory? 3. What are the GOALS of a ‘pure’ rent control law, or ordinance? I mean, why would a city government PASS a ‘pure’ rent control law in the first place? What are the goals? 4. A. In theory, why does the implementation of ‘pure’ rent control fail to achieve those goals? What “goes wrong,” in theory? B. In theory, what happens to the Supply Curve...

One common example of a price ceiling is rent control. In many cities, the local government...

One common example of a price ceiling is rent control. In many cities, the local government places a ceiling on rents that landlords may charge their tenants. The goal of this policy is to help the poor by making housing more affordable. Economists often criticize rent control, arguing that it is a highly inefficient way to help the poor raise their standard of living. One economist called rent control “the best way to destroy a city, other than bombing.” The...

A shortage results when a a. nonbinding price ceiling is removed from market. b. binding price...

A shortage results when a a. nonbinding price ceiling is removed from market. b. binding price ceiling is removed from a market. c. nonbining price celing is imposed on a market. d. binding price celing is imposed on a market.

One of the consequences of a government imposed rent control ceiling with the ceiling set below...

One of the consequences of a government imposed rent control ceiling with the ceiling set below the equilibrium rental price is: Select one: a. a surplus of apartments. b. a shortage of apartments. c. decreased search activity of people who want to rent apartments. d. an increase in maintenance and additional amenities like swimming pools and free cable

Draw the graph of a market where a binding price floor has been introduced. Analyze the...

Draw the graph of a market where a binding price floor has been introduced. Analyze the welfare effects by pointing out the change in economic surplus and its reallocation from one party to the other. Show those effects on the graph.

IN THE USA 1.When rent control, or any price control, is imposed upon a market, four...

IN THE USA 1.When rent control, or any price control, is imposed upon a market, four alternative methods of allocation emerge to determine who gets the product or service. What are those four methods? 2.In the case of rental housing, which of the four methods may do the greatest harm to society, in your opinion? Why? 3. What is the problem that rent control attempts to solve? That is, what are the goals of rent control? Why does a pure...

Question