A Rent Ceiling Creates a Deadweight Loss

question 103

Multiple Choice

A rent ceiling creates a deadweight loss

• A) if it is set below the equilibrium rent.
• B) if it is set equal to the equilibrium rent.
• C) if it set above the equilibrium rent.
• D) if it decreases the taxes the government collects in the housing market.
• E) never, because if it did create a deadweight loss, the government would not impose it.

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Definitions:

Pollution

The introduction of contaminants into the natural environment that cause adverse change, affecting air, water, and land.

Beneficiaries

Individuals or groups that receive benefits or advantages from actions, policies, or trusts, often in the context of insurance, inheritance, or social programs.

Society

A broad term defining a group of individuals living together in a more or less ordered community, sharing customs, laws, and organizations.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, leading to market equilibrium.