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Author Question: What are the major economic effects of rent ceilings? What will be an ideal ... (Read 68 times)

jeatrice

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on: Jun 29, 2018
What are the major economic effects of rent ceilings?
 
  What will be an ideal response?

Question 2

The above figure shows the utility of wealth curve for a homeowner whose only possession is a 50,000 house. Which of the following statements is TRUE?
 
  A) This person has diminishing marginal utility of wealth.
  B) This person is not risk averse.
  C) Risky situations cause this person no loss of utility.
  D) None of the above are correct.


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LegendaryAnswers

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Rent ceilings reduce the rental payments of those tenants able to find apartments at the controlled price and decrease the rental income received by landlords. They lead to a shortage of apartments, preventing some tenants from finding a suitable place to live. Another effect can be increased discrimination as landlords can choose tenants based on race, age, gender, or other criteria. Finally, rent ceilings result in black markets emerging and also increase the cost of searching for an apartment.

Answer to Question 2

A


jeatrice

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Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it

mammy1697

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Reply 3 on: Yesterday
:D TYSM

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