Quote:
Originally Posted by
tonton 
Here are my answers to the seven questions posted here...
1) Disagree. There are many cases in which licensing can reduce costs. Even if there's just ONE case, the statement is false. To make a blanket statement like this is clearly showing bias in the question.
Show us one. Then many (which is your claim).
Quote:
Originally Posted by
tonton
3) Disagree. There is always somewhere else to go. There is always opportunity for builders to build and make a profit. You don't HAVE to live in Manhattan if you work in Manhattan. And just because you're willing to pay more than some people are able to pay, doesn't mean you're ENTITLED to the desired location.
On this you are simply wrong. The shortage will occur in the area where the rent controls apply. Yes, you can build outside of that area, but then try to extend the rent controls and see what happens. Try rent controls across an entire country and see what happens. Further where people have to live or work* or what the can or are willing to pay are irrelevant to the question at issue. Your argument is basically a red herring. I do applaud you for at least giving this question a bit more thought even though you have come to an incorrect conclusion. I quite seriously doubt that anyone else who answered incorrectly really gave it that much though and that they just don't see the effects prices (and price controls) have the supply of a good or service.
*That people do work in a given city or area and are unable to afford to live there is actually a very common argument from the left in favor of rent controls for that area.
Quote:
Originally Posted by
tonton
7) Disagree. But unemployment numbers don't tell the whole story. Which is a fact that "conservatives" ignore. Market wage leads to feudal economics.
That raising wages about market prices by government command reduces employment among those below that pay/productivity level is nearly to the point of established economic fact. Further, your claim that "But unemployment numbers don't tell the whole story." is another red herring argument. But feel free to share with us what the rest of the story is so we all know.
I would love to hear both your definition of "feudal economics" and how "market wage" will lead to it.
Quote:
Originally Posted by
tonton
Even though I wasn't really "wrong".
No, you pretty much are wrong on those. But congrats on the others. There's hope for you.
I will agree that some of the questions could have been phrased better. An example would be #5. The only correct answer to that question would have to be "Don't know." That question is more as test of someone's reasoning ability. Another would be #3 could be more precisely worded to indicate the area in which the rent controls apply. But some common sense is expected here in assuming that the question means to refer to the area in which the price controls are applied, just as common sense is expected with regard to the minimum wage/unemployment question in understanding that the question means to ask what the effect of raising the minimum wage
above market rates would be. But I doubt seriously that anyone answered incorrectly because they we privately thinking, "well if the statutory minimum wage is
below market wages, then there would not likely be deleterious employment effects."
The 8th question was: "Restrictions on housing development make housing less affordable."
Actually #3 and #7 are simply two specific cases of the effects of price controls. Price ceilings will create shortages while price floors (minimum wage) will create surpluses (unemployment). These are fairly well established by logic, evidence and historical record. In fact, price ceilings (usually in the form of so-called "price gouging laws) are a chiefs reason we often see shortages of critical goods and services in areas of natural disasters like hurricanes.)
That something like a minimum wage (a price floor) would cause few people to be employed should not be surprising at all. We can easily deduce that this would happen by looking at our own individual behavior in the face of price increases. What do you do when the price of something you buy goes up? Say milk? bottled water? Movie tickets? Gasoline? Etc. What do
you do? Most people will find ways to reduce their use of the now higher priced good. Business works the same way with labor. And, by the way, various kinds of employer mandates (like mandated benefits, vacation, maternity leave, or even payroll taxes) are all simply indirect ways to increase wages (the total cost of the employee).
#1 and #8 are activities that essentially muck with supply or competition (reducing them). They (like the licensing requirements) may also have the direct effect of raising prices because licensing costs will be passed onto consumers.
