The city government recently implemented a price ceiling on the amount landlords can charge for rent. Your friend then complains “This will decrease the quantity of apartments supplied.” Evaluate this statement
Please provide the best answer for the statement.
When responding to your friend you should first explain that the price ceiling will only influence the market if it is binding, or set below the equilibrium price. If the price ceiling is set above the equilibrium price the market will remain in equilibrium. If the price ceiling be binding, you should explain that the decreased price will not only result in a decrease in the quantity supplied, but an increase in the quantity demanded. The result will be a shortage in the market for apartments.
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Which of the following is the kind of decision that can be made at the margin:
a) whether or not to hire new workers b) whether or not to go on a vacation c) whether or not to build an extra room on a home d) whether to have a dog or a cat as a pet
Thinking about the total utility gained from the consumption of a typical good, we can say in general that:
A. total utility will rise, peak, and then decline as more and more units are consumed. B. consuming more and more units of a good will eventually cause marginal utility to increase C. total utility increases by decreasing amounts, until it is maximized. Then it declines. D. total utility is maximized where the marginal utility is greatest.