Question :
32) In a housing market with a rent ceiling below : 1241608
32) In a housing market with a rent ceiling below the equilibrium rent, apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling. Why does this difference exist?
A) In the market with the rent ceiling, renters are searching for the best buy in apartments.
B) In the market with the rent ceiling, there is a wide variety in the quality of apartments for rent.
C) In the market with the rent ceiling, the quantity of housing demanded is greater than quantity supplied at the ceiling price.
D) The premise of the question is incorrect because people spend less time searching with a rent ceiling since they no longer need to look for a low-priced apartment.
E) The premise of the question is incorrect because there is no difference in the search time between a market with a rent ceiling and one without a ceiling.
33) In a market with a rent ceiling set below the equilibrium rent, the producer and consumer surplus
A) both increase.
B) both decrease, but generally not to zero.
C) do not change.
D) are eliminated.
E) are both totally converted into deadweight loss.
34) Which of the following decrease the deadweight loss from a rent ceiling set below the equilibrium rent?
i.lowering the ceiling
ii.dedicating more resources to enforcement of the ceiling
iii.raising the ceiling
A) i only
B) ii only
C) iii only
D) i and ii
E) ii and iii
35) People who benefit from a rent ceiling include
A) all landlords.
B) taxpayers.
C) tenants who have a rent-controlled apartment.
D) potential tenants, that is, people looking for apartments.
E) all landlords and some tenants.
36) When a rent ceiling below the equilibrium rent is put in place, the outcome is
A) efficient because marginal benefit equals marginal cost.
B) inefficient because marginal benefit equals marginal cost.
C) inefficient because marginal benefit is greater than marginal cost.
D) inefficient because marginal benefit is less than marginal cost.
E) efficient because marginal benefit is greater than marginal cost.
37) Assuming that the rent ceiling is strictly enforced so that there is no black market, which of the following statements about a housing market with a rent ceiling set below the equilibrium rent is correct?
A) The rent for housing equals the ceiling rent or higher.
B) There is excess supply of housing.
C) The rent ceiling increases the amount of producers’ surplus.
D) The rent ceiling creates a deadweight loss.
E) The rent ceiling enforces efficiency upon the housing market.
38) 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.
39) Rent ceilings set below the equilibrium rent
i.create a deadweight loss.
ii.increase search activity.
iii.result in a surplus of apartments.
A) i only
B) ii only
C) i and iii
D) i and ii
E) i, ii, and iii
40) The deadweight loss from a rent ceiling below the equilibrium rent is smallest when the supply of housing is
A) perfectly elastic.
B) elastic but not perfectly elastic.
C) unit elastic.
D) inelastic but not perfectly inelastic.
E) perfectly inelastic.
41) The above figure shows the market for 2 bedroom town homes in San Diego. If a rent ceiling is set at $1,000 per month then there is a
A) surplus equal to 150,000 town homes.
B) shortage equal to 100,000 town homes.
C) surplus equal to 100,000 town homes.
D) shortage equal to 150,000 town homes.
E) shortage equal to 250,000 town homes.
