Housing shortages caused by rent controls are larger in the long run because the supply of housing is more elastic in the long run. True False
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- As the time frame shifts from the short run to the long run, what happens in the market for milk with a binding price floor when the surplus is bought up by government? A) Dairy farmers are increasingly willing ot substitute toward producing more milk, and the supply curve for milk becomes more elastic B) Dairy farmers are increasingly willing to substitute away from producing milk, and the supply curve of milk becomes less elastic C) There are no changes, and the elasticity of supply for milk remains unchanged. D) dairy farmers are less willing to substitute away from producing the good, and the supply curve becomes more elastic E) the predicted losses for dairy farmers will eventually cause many farmers to go out of business and the supply curve shifts to the left and become less elasticThe pillow market is currently in equilibrium and is competitive. If the current market price is $22 per pillow and the government imposes a $5 per pillow tax on the sellers, the new market price becomes $27 per pillow. How much of the $5 tax is paid by the buyer? How much of the $5 tax is paid by the seller/ Which elasticity is larger elasticity of demand or elasticity of supply in absolute values? Which is larger |E| or |Es|?A4 Suppose that good X is traded in a competitive market. The market clearing price is $25.00 and the quantity supplied is 200. A proposed change in government policy is expected to cause the market price to increase by $1.50. Previous studies suggest that the price elasticity of supply is about 1.5. Assuming the supply schedule is linear, calculate the change in producer surplus from the government's policy shift. Round your answer to 1 decimal place and report it in the box below. Don't include the dollar sign, but if producer surplus decreases, be sure to include a negative sign in your response. your answer is
- Describe rent control in the long run. (Cons of it).Question 20) The shortages created by rent controls is largest when demand by tenants is_____ and supply by landlords is_______ . O. more elastic; less elastic O. more elastic; more elastic O. unitary elastic; unitary elastic O. less elastic: less elastic O. less elastic: more elasticIt is often argued that during periods of rapid demand expansion, when prices arerising, poor people should be protected from rising prices by imposing price controls on“necessities.” Analyze the short-run and long-run effect of imposing a maximum price belowthe equilibrium in a competitive market that is experiencing rising demand.a. Do price controls really protect poor people better than the operation of competitive markets does in the long run? Explain.b. Provide a numerical example.c. Provide a graph.
- Explain and show in a diagram why the short run effects Explain and show in a diagram why the short-run effects of rent control are likely to be less significant than the long-run effects. Explain and show in a diagram why the short run effects4A. Construct a labor market with perfectly inelastic demand that is kinked at wage w*. 4B. Construct a labor market with perfectly inelastic supply that is kinked at wage w*. 4C. Construct a labor market with perfectly elastic supply that is double-kinked at wage w*. Answer all otherwise dounvoteGiven the following information Qd = 240 – SP Qs = P Where Qd is the quantity demand, Qs is the quantity supplied and P is the price. Calculate the following: (i) Equilibrium price before the tax (ii) Producer surplus before tax (iii) Consumer surplus before tax (iv) Buyers reservation price (v) Sellers reservation price
- Demand: Qd= 2,600 - 5P Supply: Qs= 1000 + 10P What would be the amount of shortage if a price ceiling is imposed at $180?What does it mean by when you say " market forces takes its own course". a. you temper supply or demand to achieve equilibrium b. you let buyers and sellers agree on price base on SP (suggested retail price) c. you let demand and supply floats to create a market condition d. you let demand and supply dictate the price In the computation of Price elasticity of Demand, when percentage change in Quantity and percentage change in Price is the same, it results to? a. unit elastic demand b. perfectly elastic demand c. relatively elastic demand d. perfectly inelatic demand Agricultural product are always classified as a. Capital goods as they are mostly used as raw materials b. Elastic Goods c. Economic Goods d. Inelastic goodsA market is described by the following supply and demand curves: QS=2P andQD =300-2Pa. Solve for the equilibrium price(in $) and quantity.b. Two policies have been suggested to the government i) a price floor of $90 or anii)price ceiling of $90. Which policy government can take and why?c. For the adopted policy in b) what will be the price, quantity demand, quantitysupply, shortage, and surplus?