1)A rent ceiling is the maximum legal rent. Generally, the government imposes the ceiling when the equilibrium rent is considered too high. If, however, the rent ceiling ($600.00) is above the equilibrium rent ($500.00), people are already paying a rent lower than legal maximum. As a result, nothing changes and so this price ceiling is ineffective.

2)Suppose the equilibrium rent without any rent ceiling is $1,000 per month. If the rent ceiling is set below $1,000, say at $800 per month, the ceiling then makes it unlawful to rent for more than $800. An apartment shortage results because the quantity demanded exceeds the quantity supplied at $800. A rent ceiling above the equilibrium rent $1,000, say $1,200 per month, has no effect. Why? Because no apartments would be rented at this price, with or without a law, so the ceiling has no effect.

3)A minimum wage is a regulation that makes it illegal to pay or receive a wage rate lower than a specified level. If a minimum wage is set below the equilibrium wage, the minimum wage has no effect because it does not make the equilibrium wage rate illegal.

4)If a production quota is set above the equilibrium quantity, it has no effect. If a production quota is set less than the equilibrium quantity, it

decreases output and raises the price.