Tutor profile: Ross L.
For the example of rent control, who is made worse off? Who is made better off?
Rent control decreases supply of housing, decreases quality, and increases prices for new renters. So, renters, some tenants, construction companies, and the housing market is all made worse off. Rent control keeps a stable price for current renters. So existing tenants (regardless of income) are made better off.
If country A can produce more cars AND more T-shirts than country B, why would country A outsource T-shirt manufacturing to country B?
Country B must have a comparative advantage in T-shirt manufacturing. It may be true that country A can create more of both, but it has to give up more T-shirts per car manufactured than country B, so they outsource that work and import T-shirts.
Give an example of a real world situation in which the price of cabbage is cheaper this year than it was last year and graph the difference in supply and demand from last year to this year.
The government subsidized cabbage in the last year, shifting the supply curve to the right (at the same market price level, the quantity supplied increases)
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