Asked by Mohamed Araye on Jun 11, 2024
Verified
One of the ways rent control is inefficient is that it leads to:
A) higher-quality apartments.
B) high opportunity costs associated with wasted time searching for apartments.
C) markets that maximize total surplus.
D) the construction of more apartments.
Rent Control
A government policy or law that sets a maximum price landlords can charge for rent.
Opportunity Costs
The cost of the next best alternative foregone when making a decision.
Wasted Time
Time that is not used effectively or productively.
- Acquire knowledge about the impacts of rent control policies, such as the deterioration in apartment quality, inefficiency in resource utilization, and the development of underground markets.
Verified Answer
FJ
Fanta JawaraJun 12, 2024
Final Answer :
B
Explanation :
Rent control can lead to a shortage of apartments as landlords may not find it profitable to invest in building new units or maintaining existing ones. This can result in long waiting lists and increased search costs for renters. Therefore, rent control leads to high opportunity costs associated with wasted time searching for apartments.
Learning Objectives
- Acquire knowledge about the impacts of rent control policies, such as the deterioration in apartment quality, inefficiency in resource utilization, and the development of underground markets.