What does imply about the full cost of renting an apartment

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Discussion 1: Because rent controls reduce the rental price below the market clearing price, the quantity of rental units on the market must decline (meaning there are many frustrated renters). What does this imply about the full cost of renting an apartment including "key money," harassment by the landlord, and so forth? Explain.

Discussion 2: Some observers have proposed higher income and wealth taxes on the wealthy. Given that one's wealth generally depends primarily on how much output one produces, how do these taxes affect the incentives of people who are the most productive? Assume that the proceeds of the taxes are given out to the poor. How does this affect their incentives? Overall, what do you predict will happen to the total income and wealth of society as a result of higher taxes such as these?

Reference no: EM132914366

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