Explain how both renters and landlords could be either winners or losers with the imposition of rent control
What will be an ideal response?
With rent control, those renters who are able to obtain a rent-controlled apartment will win by paying a rent which is below the equilibrium rent. Those renters who are not able to obtain an apartment due to the shortage created by rent control will lose. Landlords who abide by the rent control will lose by receiving less than the equilibrium rent. Landlords who do not abide by the rent control can win by charging a rent that is higher than the controlled rent.
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If the redistributive character of the tax system is measured by looking at the additional taxes paid by high-income individuals and reduction in taxes to low-income individuals, the dollar amount of redistribution will be _____
a. overestimated b. underestimated c. estimated correctly d. estimated improperly, possibly over or under
If nominal wages and salaries are fixed as firms change product prices, the short-run aggregate supply curve is: a. vertical
b. horizontal. c. negatively sloped. d. positively sloped.