Asked by Eduardo De Jesus on Sep 23, 2024
Verified
Rent controls
A) are an example of price floors.
B) are an example of price ceilings.
C) destroy wealth by preventing the movement of apartments to higher-valued use.
D) Both b and c
Rent Controls
Government-imposed limits on the amount landlords can charge tenants for leasing properties, intended to keep housing affordable.
Price Ceilings
Government-imposed limits on how high a price can be charged for a good or service.
Price Floors
Government or regulatory-imposed minimum prices for goods or services, meant to protect producers or service providers from prices that are too low.
- Identify the role of price mechanisms (ceilings and floors) in the economy.
- Absorb the principles pertaining to the generation or disintegration of wealth by means of various economic operations and policies.
Verified Answer
VH
varsha hariharan5 days ago
Final Answer :
D
Explanation :
Rent controls are an example of price ceilings, which set a maximum price that can be charged for a product or service, in this case, apartments. They can destroy wealth by preventing apartments from being allocated to their most valued uses, as they discourage investment in housing and maintenance, leading to a shortage of quality rental properties.
Learning Objectives
- Identify the role of price mechanisms (ceilings and floors) in the economy.
- Absorb the principles pertaining to the generation or disintegration of wealth by means of various economic operations and policies.