Class: Answer Keys for Ch 4 and Ch 5 Class Activities
Packets to do the Peer Review as per the rubric & Post the
Replies to the Video Questions on the discussion forum
between Thursday & Sunday
Chapter 4
Part 1. Video Questions on Price Control: Price ceiling, the case of the
NYC Apartment Market
1. How much would be the rent if you could find a 5th avenue
apartment on a floor this high with this spectacular view?
The rent would be more than $10,000 a month. Would you like to pay less
than a fifth of your renter your mortgage? About $2000.
2. How much Alister Cook pays for his apartment and why did he pay
less for the luxury apartment in NYC?
Alister Cook pays less than a fifth because he scored. He was lucky
enough to live in this fashionable building at a time when politicians who
want to help poor people regulated the rent.
3. What did Economist Walter Williams call Alison Cook? Why?
Walter Williams called him a thief because he’s using government to take
what belongs to another person to give it to him.
That is, if there were no rent control, he would have to pay the market
price.
4. How much did Sydney Barrows pay for her apartment?
She pays about half what you have to pay for her apartment. Lots of
politicians, wealthy people in business, & celebrities benefit from rent
controls meant for the poor.
5. Why are that houses and apartments left on the free market cost
more?
The unintended consequence of the laws is that newcomers pay inflated
rents because cities with rent control tend to have less housing.
6. What happens in the cities where there are rental controls?
In the cities where there is rental control, landlords don’t want to build, in
unregulated cities like Dallas and Chicago, lots of apartments are
available. But in rent-controlled cities like New York, you may have to
bribe someone to get an apartment.
7. Name cities with NO rental control in the U.S.?
Dallas and Chicago
8. How do people get apartments in cities where there are rental
controls?
By paying brokers under the table sometimes that helps.
9. What is the most destructive and unintended consequence of rent
controls in cities across the country?
Some Landlords say, “If I can’t raise the rent, I won’t make repairs.” and
they don’t. Short of aerial bombardment, the best way to destroy a city is
through rent controls. Rent’s a big reason many landlords abandon their
buildings, just walk away from their investment. You see acres of it in New
York.
10. What kind of change has happened as far as rent control in Boston,
Massachusetts?
The city decided to end rent control. People are building housing now in
Boston for the first time in 20 years.
11. What percentage of the people needed the protection of rental control
in Boston, Massachusetts?
Author William Tucker, who wrote this book about housing policy, says
only 6% of the people getting rent protection in Massachusetts were
poor.
12. Do you support such controls in your city? Why/Why not? (Your
thought)
No. Not a good policy because it benefits both the poor and the rich
alike. It would be a very easy thing to subsidize the people that need help
paying their rent. It is not a good idea to impose this blanket system that
ruins the housing market instead of targeting the poor.
13. What new things did you learn from this video about price control in
NYC? Specify at least one.
There are many reason to establish that rent controls destroy cities since
many of the landlord abandon their building which causes difficulty in
finding available housing.No right or wrong answer.
14. What questions do you have after watching the video on price control
in NYC? Specify at least one.
Why does the government establish price control in some cities and not in
others?
Part 2. Matching
1Ed, 2Bf, 3Db, 4Fa, 5Ac, 6Ce
Part 3. Discussion Questions and Problems
1. “If price were outlawed as the rationing device (used in markets), there
would be no need for another rationing device to take its place. we would have
reached utopia.” Discuss.
This statement is false. As a result of scarcity, a rationing device is
needed to determine who gets what of the available
limited resources and goods and also to provide an incentive for the
producer of a good to produce it.
2. What kind of information does price transmit?
Price provides information about the relative scarcity of the good.
3. Should grades in an economics class be “rationed” according to dollar
price instead of how well a student does on the exams? If they were
and prospective employers learned of this, what effect might this have
on the value of your college degree?
Grades should not be rationed according to dollar price because if they
were, a college degree would no longer demonstrate student
performance, but instead would demonstrate a willingness and ability to
