MicroeconomicGOVERNMENTACTIONSINMARKETS文件材料.ppt

6;Housing Shortage Figure 6.1 shows the effects of a rent ceiling that is set below the equilibrium rent. The equilibrium rent is $1,000 a month. A rent ceiling is set at $800 a month. So the equilibrium rent is in the illegal region.;At the rent ceiling, the quantity of housing demanded exceeds the quantity supplied. There is a shortage of housing.;Because the legal price cannot eliminate the shortage, other mechanisms operate: Increased searchactivity A black market With the shortage, someone is willing to pay up to $1,200 a month.;Increased Search Activity The time spent looking for someone with whom to do business is called search activity. When a price is regulated and there is a shortage, search activity increases. Search activity is costly and the opportunity cost of housing equals its rent (regulated) plus the opportunity cost of the search activity (unregulated). Because the quantity of housing is less than the quantity in an unregulated market, the opportunity cost of housing exceeds the unregulated rent.;A Black Market A black market is an illegal market that operates alongside a legal market in which a price ceiling or other restriction has been imposed. A shortage of housing creates a black market in housing. Illegal arrangements are made between renters and landlords at rents above the rent ceiling—and generally above what the rent would have been in an unregulated market.;Inefficiency of a Rent Ceiling A rent ceiling set below the equilibrium rent leads to an inefficient underproduction of housing services. The marginal social benefit from housing services exceeds its marginal social cost and a deadweight loss arises. Figure 6.2 illustrates this inefficiency.;A lottery gives scarce housing to the lucky. A first-come, first served gives scarce housing to those who have the greatest foresight and get their names on the list first. Discrimination gives scarce housing to friends, family members, or those of the selected race or sex. None of these metho