Homework Sourse1 Rent controls force landlords to price apartments below th
1. Rent controls force landlords to price apartments below the equilibrium price level. An immediate effect is a shortage (excess demand) of apartments, because the quantity of apartments demanded is greater than the quantity supplied at the regulated price.
When cities prevent landlords from charging market rents, which of the following are common long-run outcomes? Check all that apply.
Black markets develop.
Suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon.
Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding.
Statement
Price Control
Binding or Not
Price ceiling
Price floor
Binding
Non-binding
Price ceiling
Price floor
Binding
Non-binding
2.
Although GDP is a reasonably good measure of a nation\'s output, it does not necessarily include all transactions and production for that nation.
Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply.
The value of baby-sitting services, when the babysitter is paid in cash and the transaction isn\'t reported to the government
The loss of enjoyment people incur when scenic land is converted to commercial use
Federal highway payments
The Brazilian wood that is used for flooring in a new U.S. house
The leisure time they have
3.
Nick and Rosa Bethanasamy live in Swarthmore, PA. Rosa\'s father, Tim, lives in Sweden.
For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M). Check all that apply.
Transaction
C
I
G
X
M
| Statement | Price Control | Binding or Not |
|---|---|---|
| The government prohibits gas stations from selling gasoline for more than $2.50 per gallon. | selector 1 Price ceiling Price floor | selector 2 Binding Non-binding |
| The government has instituted a legal minimum price of $3.40 per gallon for gasoline. | selector 3 Price ceiling Price floor | selector 4 Binding Non-binding |
| There are many teenagers who would like to work at gas stations, but they are not hired due to minimum-wage laws. |
Solution
1. Selector 1:Price ceiling
Selector 2: Binding
Selector 3: Price floor
Selector 4: Non-binding
Selector 5: Price floor
Selector 6: Non-binding
2. The value of baby-sitting services, when the babysitter is paid in cash and the transaction isn\'t reported to the government
3.
| Rosa buys a new BMW, which was assembled in Germany. M | ||||||
| The Federal Aviation Administration expands the runways at Philadelphia International Airport, which is just a few miles from Nick and Rosa\'s house. G | ||||||
| Rosa\'s father in Sweden orders a bottle of Vermont maple syrup from the producer\'s website. M | ||||||
| Nick\'s employer upgrades all of its computer systems using U.S.-made parts. I | ||||||
| Rosa gets a new video camera made in the United States. C |
