A rent ceiling set above the equilibrium rent efficiently ...

[ENagel]

A rent ceiling set above the equilibrium rent efficiently allocates resources in the housing market.
 
  Indicate whether the statement is true or false

Question 2

In the market for bicycles, explain what happens to the supply and demand curves when there is an increase in the price of steel used to make bikes.
 
  What will be an ideal response?

[welcom1000]

Answer to Question 1

FALSE

Answer to Question 2

An increase in the price of steel is an increase in the price of a resource used to make the good. As a result, the supply of bicycles decreases and the supply curve shifts leftward. There is no change to the demand, so the demand curve does not shift. The equilibrium price of a bicycle rises and the equilibrium quantity decreases.