MRU8.6: Price Ceilings: Rent Controls

Someone who keeps a rent-controlled apartment in New York City for occasional low-value use is demonstrating which impact of rent controls? - Rent controls lead to deadweight loss. - Rent controls cause shortages. - Rent controls cause a misallocation of resources. - Rent controls create wasteful decreases in quality.

A: Rent controls cause a misallocation of resources.

The data from Ontario, Canada, shown in the video confirms which impact of rent controls? - Rent controls lead to deadweight loss. - Rent controls create wasteful decreases in quality. - Rent controls cause shortages. - Rent controls misallocate resources.

A: Rent controls cause shortages.

In New York City, Paris, and other cities, rent controls caused which of the following? - Parks and other green spaces turned into apartment buildings and then into neighborhoods. - Abandoned buildings turned into serviceable apartments and then into luxury condos. - Neighborhoods turned into mixed use spaces and then into retail districts. - Serviceable apartments turned into slums and then into abandoned buildings.

A: Serviceable apartments turned into slums and then into abandoned buildings.

What will happen to the amount of discrimination under a rent control? - There will be more discrimination because rent controls reduce the price of discrimination. - There will be less discrimination because renters will be less picky about where they live. - There will be less discrimination because rent controls increase the price of discrimination. - There will be more discrimination because renters will be pickier about where they live.

A: There will be more discrimination because rent controls reduce the price of discrimination.

Can a rent control lead to bribery? - Yes, because buyers still want to compete with one another, even if the rent is controlled. - No, because bribery in most forms is illegal. - Yes, because the wasteful increases in quality will make the apartments highly sought-after. - Yes, because sellers still want to compete with one another, even if the rent is controlled.

A: Yes, because buyers still want to compete with one another, even if the rent is controlled.

Rent controls are an example of: - a housing voucher. - a price ceiling. - a price floor. - a housing tax.

A: a price ceiling.

Rent controls may inspire landlords and apartment owners to: - offer bribes in order to attract renters. - discontinue discriminatory practices. - build too many new apartments. - cut back on routine maintenance.

A: cut back on routine maintenance.

The supply for apartments is going to be very _______ in the _______. - elastic; short run - inelastic; short run - inelastic; long run - elastic; long run

A: inelastic; short run

Most of the short-run shortage in apartments that results from a rent control comes from: - apartments that are immediately taken off the market as a result of the rent control. - renters who are brought into the market only as a result of the rent control. - apartments that are built but remain empty soon after the rent control is enacted. - renters who are evicted from their apartments for inability to pay the high controlled price.

A: renters who are brought into the market only as a result of the rent control.

In the long run, the shortage caused by a rent control will get worse as: - the quantity demanded starts to rise. - the quantity supplied continues to fall. - the quantity supplied starts to rise. - the quantity demanded continues to fall.

A: the quantity supplied continues to fall.