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:

Privatization

The process of transferring ownership of a business, enterprise, agency, or public service from the government to private individuals or organizations.

Deregulation

The process of removing government regulations, oversight, and involvement from an industry.

Subsidization

Financial assistance granted by the government or an organization to support an economic sector, business, or consumer, making the goods or services more affordable.

Capitalist States

Countries where economic systems are based on private ownership and the free market determines allocation of resources.