How does rent control tend to cause persistent imbalances in the market for housing?
a. Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage.
b. Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus.
c. Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage.
d. Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.
a
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According to economic theory, the political process tends to
A) benefit every participant equally. B) harm every participant equally. C) concentrate benefits in the hands of special interest groups and disperse the costs throughout the uninformed voters. D) support public projects that clearly pass a strict benefit-cost analysis.
Newspaper accounts of the U.S. labor market often point out that many people are working more hours than their parents did. What might explain this phenomenon?
A) the substitution effect B) the endowment effect C) bounded rationality D) the income effect