In a Housing Market with a Rent Ceiling Set Below

question 207

Multiple Choice

In a housing market with a rent ceiling set below the equilibrium rent,

• A) some people seeking an apartment to rent will not be able to find one.
• B) the total cost of renting an apartment will decrease for all those seeking housing.
• C) some landlords will not be able to find renters to fill available apartments.
• D) search will decrease because renters no longer need to search for less expensive apartments.
• E) None of the above answers are correct because to have an impact, the rent ceiling must be set above the equilibrium rent.

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Definitions:

Marginal Social Benefits

The incremental benefit the public receives from consuming an additional unit of a good or service.

Marginal Private Benefits

The additional benefits received by an individual or firm from consuming or producing one extra unit of a good, not considering external effects.

Government Intervention

Actions taken by the government to influence or regulate various activities and outcomes in the economy, such as setting taxes, subsidies, regulations, and price controls.

Marginal Private Benefit

The surplus value that consumers or producers get from buying or making an extra unit of a good or service.