Some years ago The Wall Street Journal reported that the ...

[Jramos095]

Some years ago The Wall Street Journal reported that the government of Thailand plans to launch a chain of more than 3,000 Thai restaurants world-wide over the next five years, with the largest number, more than 1,000, slated for the United States.
 
   The Thai government will have a 30 percent minority stake in the restaurants and the rest will be given to Thai owners. The country's deputy commerce minister explains that the government will play an active role in drawing up menus, making sure that genuine Thai food is served and ensuring that 70 percent of supplies for the restaurants are imported from Thailand. Because the Thai government will be part owner of these restaurants, are these restaurants public goods?

Question 2

What is search activity and how does it influence consumer surplus when a rent ceiling creates a housing shortage?
 
  What will be an ideal response?

[Kjones0604]

Answer to Question 1

Although the government of Thailand has a minority stake in these restaurants, these restaurants are both rival and excludable. Hence these restaurants are like all restaurants, specifically, they are private goods. In defining a public good, the source of financing is irrelevant. To be a public good, the good must be nonrival and nonexcludable and a restaurant is neither.

Answer to Question 2

Search activity is the time spent looking for someone with whom to do business. When a rent ceiling creates a shortage of housing, search activity increases. As people spend more time searching for rental housing, the opportunity cost of housing, which is the rent plus the value of the search time, increases and therefore consumer surplus shrinks.