chapter 2 part 3 form class: price controls

Question 1

rent control

Answer 1

trash af apparently

leads to shortage if there is a ceiling, meaning that a lot of suppliers won’t be willing to supply homes

Question 2

price ceilings

Answer 2

binding constraint that creates shortage

in the long run, the shortage is even greater

there is less quantity supplied than quantity demanded

Question 3

what does a price ceiling above the equilibrium price do?

Answer 3

nothing bruv

its gonna hit the equilibrium price and quantity

Question 4

what must sellers to to ration the goods among buyers when facing a shortage?

Answer 4

use rationing mechanisms

Question 5

what are some rationing mechanisms uses to combat shortages if you’re a seller?

Answer 5

(1) Long lines

(2) Discrimination according to sellers’ biases

Question 6

why are rationing mechanisms perceived to be unfair or inefficient?

Answer 6

the goods do not necessarily go to the buyers who value them most highly

Question 7

what does a price floor above the equilibrium do?

Answer 7

its a binding constraint

creates a surplus