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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 effects
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- 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 O FalseTo 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.Rent controls force landlords to price property below the equilibrium price level. An effect of this is to create a shortage (excess demand) of rental property, as the quantity of rental property demanded is greater than the quantity supplied at that price. When legislation prevents landlords from charging market rents, what can happen in the long run as a result? Check all that apply. The quantity of available rental housing units falls. The future supply of rental housing units increases. An underground economy develops. Landlords earn lower profits from renting housing units, but the rent charged has no effect on either the quantity or quality of rental units.
- The town of Whoovile wants to increase the amount of affordable housing in town. Assume that housing is a perfectly competitive industry in Whooville, and that firms have increasing marginal costs. The mayoral candidates propose different policies. Candidate Lou wants the city to build a new housing complex. Draw graphs showing the effect of a new complex on the price and quantity of housing in the short run and in the long run.Describe any Pros or Cons to Rent Control in the Short-Run.Consider the market for rental housing in Yourtown. The demand and (short-run) supply schedules for rental housing are given in the table. a. In a free market for rental housing, the equilibrium price is $ 600 and the equilibrium quantity is 100,000 units. (Type whole numbers.) b. Now suppose the government in Yourtown decides to impose a ceiling on the monthly rental price. Such a ceiling should be set $ in order to have any effect on the market because this is the C Price ($ per month) 1400 1200 1000 800 600 400 200 Market for Rental Housing Quantity Demanded (thousands of units) 20 40 60 80 100 120 140 Quantity Supplie (thousands of uni 180 160 140 120 100 80 60
- In an unregulated, competitive market we could calculate consumer surplus if we knew the equations representing supply and demand. For this problem assume that supply and demand are as follows: Supply P = 4 + 0.116Q Demand P = 25 - 0.10Q where P represents unit price in dollars and Q represents the number of units sold each year. Calculate the annual value of aggregate consumer surplus.Under rent control, bribery is a potential mechanism toMICROECONOMICS In the market for yoghourt the demand curve is D(p) = 106 - 2,5p, and supply is given by S (p) = 1p + 8. Calculate the value of excess demand (which can be 0), if the government sets a price ceiling p = 29! Use 2 decimals in your answer!
- Give some examples of products that are likely to have little if any producer surplus and explain why.Consider the effects of a natural disaster like hurricane Katrina on a metropolitan economy. In the initial (prehurricane) equilibrium, total employment in the metropolitan area is 500,000 workers and the daily wage is $100. The price elasticity of supply of labor is 4.0 and the price elasticity of demand for labor is −1.0. Suppose the hurricane reduces labor supply (a horizontal shift of the supply curve) by 100,000 workers. a. Use a supply-demand graph of the urban labor market to show the effects of the hurricane. b. The equilibrium wage [increases, decreases] by percent (to $ ) computed as. . . . c. The equilibrium employment [increases, decreases] by percent (to workers), computed as. . . . d. The reduction in the equilibrium employment is [greater, less] than the initial decrease in labor supply because. .Economic theory states that a wage set about the equilibrium will create a surplus of labor. Are unions creating a surplus of labor?
