If a Rent Ceiling Imposed by the Government Is Greater

question 30

Multiple Choice

If a rent ceiling imposed by the government is greater than the equilibrium rent for housing,then

• A)the supply of rental housing will increase.
• B)a shortage of housing will occur.
• C)a surplus of housing will occur.
• D)the equilibrium rent will prevail as long as all else remains constant.
• E)the equilibrium rent will rise.

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Definitions:

Efficient Allocation

Efficient allocation involves the distribution of resources in a manner that maximizes productivity and utility, often considered optimal in economic theory.

Government Failure

Situations where government interventions in the market lead to inefficiencies, misallocation of resources, or failure to achieve desired social or economic outcomes.

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, often justifying government intervention.

Government Failure

Situations where government intervention in the economy creates inefficiencies or worsens outcomes.