ECON 201- Ch.9 Section 4 Questions

Because rent controls on apartments reduce profits

Apartment managers will give less consideration to renters' complaints

Figure: Short and Long Run Shortages Use the figure. At a rent-controlled price of $800, the short-run shortage of apartments is ____ and the long-run shortage is ____.

4,000; 12,000

(Figure: Supply and Demand 5) Refer to the figure. In the figure, representing a market for apartments, a rent-controlled price of $800 will cause:

A short-run shortage of 3,000 apartments

Rent Controls are

An inefficient way to help the poor in raising their standard of living.

Over time, housing shortages caused by rent control __ because the supply of housing is __ elastic in the long run.

Increase; More

New housing takes some time to build, so rent control creates larger shortages in the

Long run than in the short run because long-run supply is more elastic

Under rent control, tenants can expect

Lower rent and lower quality housing

(Figure: Supply and Demand 5) Refer to the figure. In the figure, representing a market for apartments, with a rent-controlled price of $800, the long-run supply curve will be __ elastic than the short-run supply curve, causing the _.

More; shortage to increase to 6,000 apartments

A rent control is a regulation that

Prevents rents from rising to equilibrium levels.

Which is the MOST correct statement about the impact of rent controls

The short-run supply curve for apartments is inelastic, so rent controls create smaller shortages in the short run than in the long run.