Markets in Action, ch.6

Markets in Action, ch.6 - Markets in Action, ch. 6 I....

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Markets in Action, ch. 6 I. Housing Markets and Rent Ceilings a. Short-Run Supply 1. Short-run supply curve shows change in quantity of housing supplied as rent changes ii. Long-Run Supply 1. Curve shows how quantity of housing supplied responds to change in price after enough time elapsed for new buildings to be build or existing ones destroyed iii. Equilibrium 1. Equilibrium rent and quantity are determined by demand and short-run supply b. Long-Run Adjustments c. Regulated Housing Market 1. Price ceiling a. Regulation that makes it illegal to charge price higher than specified level 2. Rent ceiling a. Price ceiling applied to housing markets 3. Price ceiling set above equilibrium price has no effect 4. Price ceiling below equilibrium price has effects on market d. Search Activity 1. Time spent looking for someone with whom to do business 2. Opportunity cost is equal not only price but also value of search time spend finding good e. Black Markets 1. Illegal market in which price exceeds legally imposed price ceiling f. Inefficiency of Rent Ceilings 1. Deadweight loss is borne by consumers can’t find housing and producers who can’t supply housing g. Are Rent Ceilings Fair? 1.
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Markets in Action, ch.6 - Markets in Action, ch. 6 I....

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