Other Things Being Equal, the Increase in Rents That Occurs

question 137

Multiple Choice

Other things being equal, the increase in rents that occurs after rent controls are abolished is smaller when:

• A) the own price elasticity of demand for rental homes is price inelastic.
• B) the own price elasticity of demand for rental homes is price elastic.
• C) the own price elasticity of demand for rental homes has unitary price elasticity.
• D) rented homes and owned homes are complements.
• E) rented homes and owned homes are substitutes.

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Definitions:

Pharmaceutical Industry

A sector of the healthcare system that deals with the development, production, and marketing of medications.

Expensive

Having a high price or cost, typically in relation to value or to the financial means of the buyer.

Cocaine

A powerful and illegal stimulant drug derived from the leaves of the coca plant.

Illegal Drugs

Substances whose production, sale, or possession is prohibited by law due to their potential effects on health and society.