Rent control is typically imposed ostensibly for the purpose of helping the poor. Why might you be able to argue that few poor people will actually be the beneficiaries of such controls?
What will be an ideal response?
Rent control certainly does have the effect of keeping a ceiling on rent. However, it only works in the prescribed area. As poor people begin to look for housing in the regulated areas they eventually come up empty handed as they discover that there is a shortage of such housing. They must then look for housing in the unregulated area. But by now many of those who couldn't find housing in the regulated area will be bidding up the rents in the unregulated areas of the city.
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A marginal external cost of a product is equal to
A) what the producer has to pay to hire resources to produce another unit. B) the cost someone other than the producer incurs when another unit is produced. C) the cost the producer incurs to produce another unit. D) what the consumer must pay when he or she buys the good or service. E) None of these answers describes a marginal external cost.
A change in which of the following shifts the demand curve?
A) the number of sellers in the market B) the price of the resources used to produce the product C) the technology with which the product is produced D) the tastes and preferences of consumers