Question

In this chapter, we learned about how price controls (such as rent control and minimum wage) create various negative side effects. In your opinion, should the government abandon the price controls policy?

Answer 1

Rent control and minimum wage price controls have negative consequences for both consumers and producers, leading to housing shortages and job losses for low-skilled workers. Therefore, the government should abandon these policies.

Step-by-step explanation:

Price controls, such as rent control and minimum wage, have negative side effects that can harm both consumers and producers. Rent control, for example, may seem to benefit renters, but it can lead to a decrease in the number of available rental units, causing a shortage and making it harder for people to find housing. Similarly, minimum wage can result in job losses and reduced employment opportunities for low-skilled workers. Considering these negative consequences, in my opinion, the government should abandon price controls policies to promote a more efficient and competitive market.