RENT CONTROLS A. If a city decides to use rent controls (a price ceiling) to “solve” the problem of high rent for the poor. State how each of the…
September 3, 2020
Assume that heating oil and natural gas are substitutes for each other.
September 3, 2020




14. Suppose that wire production in the city with the input coefficients shown in Table 6-3 increases by $100.

a. Compute the first, second, and third rounds of spending resulting from the increase in wire sales, using the format of Figure 6-6 to report your results.

b. By how much does spending on wire, computers, and local goods eventually increase?

c. What is the ultimate increase in total sales?

15. Consider a city that estimates its export multipliers from the input coefficients from a 1965 input-output study.

a. Will the city overestimate or underestimate the stimulative effects of exports?

b. If your answer to (a) is “It depends on . . . ,” make a list of questions that you would ask Ms. Information, the most knowledgeable person in the city. Note: She does not know the current input coefficients.

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