"The market has failed to provide enough rental housing in New York City. This demonstrates another failure of free markets-they may lead to shortages of necessities." Explain why you agree or disagree
An economist would disagree. The free market leads to equilibrium, at which quantity demanded equals quantity supplied. There are neither shortages nor surpluses at the equilibrium point. The NYC shortage of rental housing is a result of rent ceilings, which interfere with the ability of the market to allocate scarce resources.
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Banking panics are especially dangerous because:
A. they can lead to other panics, such as retail panics. B. the government will respond by seizing all banking assets. C. they can start easily and spread quickly. D. the banking sector employs about 25% of workers in the United States.
Jamal earns $160,000 per year and Josephina earns $80,000 per year. If Jamal pays $16,000 in income taxes and Josephina pays $5,000 in income taxes, the income tax system would be
A) regressive. B) progressive. C) proportional. D) marginal.