For each of the following statements, tell whether the statement is TRUE, FALSE, or UNCERTAIN, and explain your reasoning. a) If the good produced by a monopoly causes positive externalities, then the extra benefit of the positive externalities will mitigate any deadweight loss caused by the monopoly's pricing power. b) When income rises, a demand curve will always shift out, increasing the quantity that will be bought at all price levels. c) The demand for a good will shift inward when the price of a complementary good increases d) If rent control is imposed in a city then this will cause landlords in neighboring cities to lower their rents to compete with landlords in the rent-controlled city; otherwise, they will lose tenants to the rent-controlled city
For each of the following statements, tell whether the statement is TRUE, FALSE, or UNCERTAIN, and explain your reasoning. a) If the good produced by a monopoly causes positive externalities, then the extra benefit of the positive externalities will mitigate any deadweight loss caused by the monopoly's pricing power. b) When income rises, a demand curve will always shift out, increasing the quantity that will be bought at all price levels. c) The demand for a good will shift inward when the price of a complementary good increases d) If rent control is imposed in a city then this will cause landlords in neighboring cities to lower their rents to compete with landlords in the rent-controlled city; otherwise, they will lose tenants to the rent-controlled city
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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For each of the following statements, tell whether the statement is TRUE, FALSE, or UNCERTAIN, and explain your reasoning.
a) If the good produced by a monopoly causes positive externalities, then the extra benefit of the positive externalities will mitigate any deadweight loss caused by the monopoly's pricing power.
b) When income rises, a demand curve will always shift out, increasing the quantity that will be bought at all price levels.
c) The demand for a good will shift inward when the price of a complementary good increases
d) If rent control is imposed in a city then this will cause landlords in neighboring cities to lower their rents to compete with landlords in the rent-controlled city; otherwise, they will lose tenants to
the rent-controlled city
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