Assuming That the Rent Ceiling Is Strictly Enforced So That

question 12

Multiple Choice

Assuming that the rent ceiling is strictly enforced so that there is no black market,which of the following statements about a housing market with a rent ceiling set below the equilibrium rent is correct?

• A) The rent for housing equals the ceiling rent or higher.
• B) There is excess supply of housing.
• C) The rent ceiling increases the amount of producers' surplus.
• D) The rent ceiling creates a deadweight loss.
• E) The rent ceiling enforces efficiency upon the housing market.

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Definitions:

Capital Goods

Long-term assets used by businesses to produce goods and services, such as buildings, machinery, and equipment.

Pierre-Joseph Proudhon

A French socialist philosopher and politician, best known for his declaration that "property is theft" in the context of his critique of the social injustices of his time.

External Benefits

Benefits of a product or service that are enjoyed by people who are not directly involved in the purchase or production of it.

Federal Government

The national government of a federal country, which holds the central political authority.