One of the Difficulties with an Economic Policy Such as Rent

question 125

Multiple Choice

One of the difficulties with an economic policy such as rent control is that:

• A)policy makers do not consider its secondary effects.
• B)economists disagree about the impacts of the policy.
• C)it is difficult to enforce antidiscrimination laws in the rental market.
• D)it makes landlords wealthy at the expense of renters.
• E)the pressure from landlords has resulted in its repeal in many cities.

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Definitions:

Contribution Margin

The residual amount from sales income following the deduction of variable expenses, allocated for covering fixed costs and producing profit.

Variable Costs

Expenses that vary in relation to the amount of production or business activity.

Fixed Costs

Costs that do not change with the level of output produced, such as rent and salaries.

Break-Even Point

The financial analysis term where total costs and total revenues are equal, resulting in no net loss or gain for the business.