Macroeconomics (Mcgraw-hill Series in Economics)
10th Edition
ISBN: 9781259663048
Author: David C Colander
Publisher: McGraw-Hill Education
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Question
Chapter 5, Problem 8IP
(a)
To determine
Rent control and the availability of apartments.
(b)
To determine
Side payments and the availability of apartments.
(c)
To determine
Impact of eliminating the rent control.
(d)
To determine
Political appeal for rent control.
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What is rent control?
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?
Next question
The graph shows the demand for on-campus student housing at
Purdue University in Lafayette, Indiana. The college has 12,000 rooms for rent.
Rent (dollars per week)
175-
If a rent ceiling of $75 a week is strictly enforced and there is no black market, who
gains and who loses?
150-
125-
If a rent ceiling of $75 a week is strictly enforced and there is no black market,
100-
O A. students who cannot find on-campus housing gain because it's more fun
to live off campus
75
B. the university gains because it doesn't have any empty rooms on campus
D
50-
OC. the university gains and the owners of off-campus housing lose
O D. students who get the cheaper on-campus housing gain and the university
and those students who cannot find on-campus housing lose
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Chapter 5 Solutions
Macroeconomics (Mcgraw-hill Series in Economics)
Ch. 5.1 - Prob. 1QCh. 5.1 - Prob. 2QCh. 5.1 - Prob. 3QCh. 5.1 - Prob. 4QCh. 5.1 - Prob. 5QCh. 5.1 - Prob. 6QCh. 5.1 - Prob. 7QCh. 5.1 - Prob. 8QCh. 5.1 - Prob. 9QCh. 5.1 - Prob. 10Q
Ch. 5.A - Prob. 1QECh. 5.A - Prob. 2QECh. 5.A - Prob. 3QECh. 5.A - Prob. 4QECh. 5.A - Prob. 5QECh. 5.A - Prob. 6QECh. 5.A - Prob. 7QECh. 5.A - Prob. 8QECh. 5.A - Prob. 9QECh. 5 - Prob. 1QECh. 5 - Prob. 2QECh. 5 - Prob. 3QECh. 5 - Prob. 4QECh. 5 - Prob. 5QECh. 5 - Prob. 6QECh. 5 - Prob. 7QECh. 5 - Prob. 8QECh. 5 - Prob. 9QECh. 5 - Prob. 10QECh. 5 - Prob. 11QECh. 5 - Prob. 12QECh. 5 - Prob. 13QECh. 5 - Prob. 14QECh. 5 - Prob. 15QECh. 5 - Prob. 16QECh. 5 - Prob. 17QECh. 5 - Prob. 1QAPCh. 5 - Prob. 2QAPCh. 5 - Prob. 3QAPCh. 5 - Prob. 4QAPCh. 5 - Prob. 5QAPCh. 5 - Prob. 1IPCh. 5 - Prob. 2IPCh. 5 - Prob. 3IPCh. 5 - Prob. 4IPCh. 5 - Prob. 5IPCh. 5 - Prob. 6IPCh. 5 - Prob. 7IPCh. 5 - Prob. 8IPCh. 5 - Prob. 9IPCh. 5 - Prob. 10IPCh. 5 - Prob. 11IPCh. 5 - Prob. 12IPCh. 5 - Prob. 13IPCh. 5 - Prob. 14IP
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Similar questions
- Draw a supply and demand graph showing rent control. Indicate the black market price. Does rent control cause a surplus or a shortage? Is there more or less apartments available to rent?arrow_forwardWhat are the implications if the government started to control prices for products and how would this influence buying?arrow_forwardAre rent control laws helping/hurting the housing market? What are some of the advantages and disadvantages of rent control? Apart from making and enforcing laws, how can the government enter the housing market system to prevent high rents?arrow_forward
- City 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_forwardHow do price controls affect the market?arrow_forwardSuppose the equilibrium price for apartments is $800 per month and the government imposes rent controls of $500. Which of the following is unlikely to occur as a result of the rent controls? a. The quality of apartments will improve. b. There will be a shortage of housing. c. Landlords may be offered bribes to rent apartments. d. Landlords may discriminate among apartment renters. e. There may be long lines of buyers waiting for apartments.arrow_forward
- How does a tax on sellers affect the market equilibrium?arrow_forwardThe figure below shows the demand for on-campus housing. The college has 200 rooms to rent. If the college puts a strictly enforced rent ceiling on rooms of $550 a month: a. What is the rent? b. How many rooms are rented? c. Is the on-campus housing market efficient? Explain why or why not. Price (dollars per month) 700 650 600 550 500 D 150 175 200 225 250 Quantity (rooms)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_forward
- please plot a graph showing the effect of a government subsidy on the market for surgical masks.arrow_forward"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?"arrow_forwardSome cities impose rent control laws, which are price controls or limits on the price of rental accommodations (apartments, houses, and mobile homes). New York City alone had over two million rent-controlled apartments in the early 1950s, but only about 27,000 as of 2014. Show the effect of a rent control law on the equilibrium rental price and the quantity of N.Y. apartments. Show the amount of excess demand on your supply-and-demand diagram. Consider the market rental dwellings in New York illustrated in the figure to the right. Suppose the maximum rent with New York's laws is p. 1.) Using the point drawing tool, indicate the quantity of rental dwellings demanded and the market rent with the rent control laws. Label this point 'ed.' 2.) Using the point drawing tool, indicate the quantity of rental dwellings supplied and the market rent with the rent control laws. Label this point 'es.' Carefully follow the instructions above, and only draw the required objects. P, rent Q Q, quantity…arrow_forward
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