Deck 35: Rent Control

Question 1

If the rent controlled rent is above the equilibrium the result will be

A)that landlords will charge more than the equilibrium rent.
B)a shortage of rental apartments.
C)a surplus of rental apartments.
D)nothing different than if there were no rent control.

Answer 1

D

Question 2

In Figure 35.1, if rents are uncontrolled then the amount that renters will want, will be Figure 35.1

A)0
B)Q'
C)Q*
D)Q"

Answer 2

C

Question 3

Those that gain from the imposition of rent control are

A)all tenants.
B)those tenants who maintain their apartments.
C)landlords.
D)tenants who pay higher rent.

Answer 3

B

Question 4

The shortage that results from rent control will be greater

A)in the short run.
B)in the long run.
C)when demand is more elastic.
D)B)and C)

Question 5

The shortage that results from rent control will be smaller

A)in the short run.
B)in the long run.
C)when demand is more inelastic.
D)B)and C)

Question 6

The degree to which rent controls affect the market for apartments depends on
A)the number of years the rent control law has been in effect.
B)the rules given within the law for rent increases.
C)the intent of the lawmakers.
D)both

A)and B)

Question 7

In Figure 35.1, if rents are controlled so that they may go no higher than R_max, the amount that landlords will want, will be Figure 35.1

A)0
B)Q'
C)Q*
D)Q"

Question 8

A sure sign of the existence of an underground market for rent-controlled apartments in New York City is that

A)rents are high.
B)apartment dealers work alongside drug dealers on its city streets.
C)though 60% of the city's apartments are rent-controlled only 3% of the apartment ads in newspaper are for rent-controlled apartments.
D)an open bribe must be paid to the mayor to get a rent controlled apartment.

Question 9

Those that lose from the imposition of rent control are

A)all tenants.
B)taxpayers.
C)those tenants who lose their apartments.
D)tenants who pay lower rent.

Question 10

In Figure 35.1, if rents are uncontrolled then the amount that landlords will want to rent will be Figure 35.1

A)0
B)Q'
C)Q*
D)Q"

Question 11

In Figure 35.1, if rents are controlled so that they may go no higher than R_max, the amount that renters will want, will be Figure 35.1

A)0
B)Q'
C)Q*
D)Q"

Question 12

An economist looks at rent controlled prices as an example of a

A)price floor.
B)equilibrium.
C)price ceiling.
D)engaged price.

Question 13

Those that lose from the imposition of rent control are

A)all tenants.
B)those tenants who maintain their apartments.
C)landlords.
D)tenants who pay lower rent.

Question 14

In Figure 35.1, if rents are controlled then number of apartments that used to be rented that are now no longer rented is Figure 35.1

A)0
B)Q*-Q'
C)Q"-Q*
D)Q"-Q'

Question 15

Rent control is more prevalent in

A)cities.
B)suburbs.
C)rural areas.
D)the Midwestern U.S.

Question 16

When renters are faced with higher rent demands by landlords they

A)must simply pay the higher rent, having no alternatives.
B)can move costlessly, thereby escaping the higher rent.
C)can move, but such a move costs renters time and money.
D)must ask permission of their landlord to leave.

Question 17

The degree to which rent controls affect the market for apartments depends on
A)supply elasticity.
B)the intent of the lawmakers.
C)demand elasticity.
D)

A)and C)

Question 18

A sure sign of the existence of an underground market for rent-controlled apartments in New York City is that

A)rents are high.
B)apartment dealers work alongside drug dealers on its city streets.
C)some apartments are subleased from the dead.
D)an open bribe must be paid to the mayor to get a rent controlled apartment.

Question 19

The elasticity of demand for apartments is greatest when

A)there are few neighboring towns/suburbs in which to live.
B)there are many neighboring towns/suburbs in which to live.
C)local politicians are religious.
D)there are other price controls in towns besides on rent.

Question 20

Elasticity of demand and elasticity of supply for apartments is greatest in

A)the long run.
B)the short run.
C)the intermediate period.
D)rural areas.

Question 21

A price ceiling is a price

A)above which a seller may not charge.
B)below which a buyer may not pay.
C)below which a seller may charge.
D)set by the market.

Question 22

One city that has repealed many of its rent-control laws is

A)San Jose.
B)Boston.
C)New York.
D)Miami.

Question 23

If a landlord can get everyone out of the apartment building and refurbish it they

A)must still only charge the rent that they were charging before the repairs.
B)can charge whatever rent they want, and increase it whenever they want.
C)can charge whatever rent they want, but it then becomes controlled at a higher rent.
D)can only charge a refurbishing fee that is also controlled.

Question 24

The argument that demand for apartments is inelastic in the short run is based on the idea that

A)it is costly to move to a different location.
B)it takes time to build new apartments.
C)people will change apartments quickly when there are small changes in rent.
D)landlords will fix up many new apartments when there are small changes in rent.

Question 25

Rent control continues to survive despite its flaws because

A)those not displaced by the policy are beneficiaries of the policy and vote to keep it.
B)economists generally favor it.
C)landlords like it's simplicity.
D)it creates economic growth in a city.

Question 26

The argument that demand for apartments is more elastic in the long run is based on the idea that

A)it is costly to move quickly to a different location.
B)it takes time to build new apartments.
C)people will change apartments more readily when there is only a short time to benefit from lower rent.
D)landlords will fix up many new apartments when there are small changes in rent.

Question 27

Rent control laws typically are established when

A)rents are rising very quickly.
B)rents are stable but at a low level.
C)rents are stable but at a high level.
D)rents are falling very quickly.

Question 28

Rent control continues to survive despite its flaws because

A)those displaced by the policy do not live in the community and cannot vote to end it.
B)economists generally favor it.
C)landlords like it's simplicity.
D)it creates economic growth in a city.

Question 29

One result of rent control is the desire by landlords for tenants to leave, so tenants

A)simply leave.
B)have an incentive report all infractions, no matter how minor to the authorities,
C)have an incentive to perform many repairs for themselves.
D)have an incentive to offer more rent.

Question 30

The argument that supply of apartments is inelastic in the short run is based on the idea that

A)it is costly to move to a different location.
B)it takes time to build new apartments.
C)people will change apartments quickly when there are small changes in rent.
D)landlords will fix up many new apartments when there are small changes in rent.

Question 31

The argument that supply for apartments is more elastic in the long run is based on the idea that

A)it is costly to move to a different location.
B)it takes time to refurbish existing apartments or build new ones.
C)people will change apartments quickly when there are small changes in rent.
D)landlords will rent only what they have.