The deadweight loss in a housing market with a rent ceiling set below the equilibrium rent is the
A) loss to those who cannot find apartments and the gain to landlords who charge black market rents.
B) loss to those who cannot find apartments and the loss to landlords who cannot offer housing at the lower rent ceiling.
C) loss to landlords and the gain to tenants who pay a fairer rent.
D) loss to tenants and the gain to landlords who have the incentive to offer more apartments for rent.
E) gain to landlords and to tenants because now a fairer rent is charged.
B
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From the manager's perspective:
A) it is important to treat implicit costs as explicit in order to make sound strategic decisions. B) implicit costs are simply a theoretical construct and should be ignored in the decision-making process. C) only explicit costs matter because accounting profit is based on explicit costs. D) there is no difference between implicit and explicit costs. As such, treating implicit costs as explicit would result in double counting and an overstatement of total costs.
If its value of cross-price elasticity is negative, a good must be a necessity
a. True b. False