Use the Following to Answer Questions

question 200

Multiple Choice

Use the following to answer questions:
Figure: Rent Controls
-(Figure: Rent Controls) Look at the figure Rent Controls. If rent controls are set at Rent₁:

• A) rental apartments may be of inefficiently low quality.
• B) there will be an efficient allocation of rentals.
• C) some landlords may break the law by renting below the mandated price.
• D) new apartments will be constructed.

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Definitions:

Output

Output refers to the amount of goods or services produced by a firm or economy within a certain period.

Physical Capital

Consists of tangible, man-made objects that a business uses to produce goods or services, such as buildings, machinery, and equipment.

Short Run

A period in economics where at least one factor of production is fixed, limiting the ability of the economy or firm to adjust to changes in demand or supply.

Productive

Relating to or involving the creation of goods or services that satisfy human wants; the efficiency and effectiveness in producing outputs from inputs.