Despite their differences, with which proposition are two economists chosen at random most likely to agree? The erection of tariffs and quotas are preferable to free trade. Taxing polluters will never help to protect the environment. Rent controls can ruin a city.
The Correct Answer and Explanation is:
Correct Answer: Rent controls can ruin a city.
Explanation:
Among the propositions given, most economists are likely to agree with the statement: “Rent controls can ruin a city.” This consensus is rooted in basic economic principles of supply and demand. Rent control refers to government-imposed limits on how much landlords can charge tenants. Although it is often introduced with the goal of keeping housing affordable, economists generally argue that it leads to long-term negative consequences.
First, rent control distorts the housing market. By capping rents, landlords may lose the incentive to maintain or improve properties, leading to deteriorating housing quality. Furthermore, new developers may be discouraged from building additional housing due to reduced profitability, which worsens housing shortages in cities with high demand.
Second, rent control often benefits a small group of tenants at the expense of the broader public. Long-term tenants may enjoy low rents, but newcomers face difficulty finding available units. This mismatch creates inefficiencies, such as people holding on to apartments they no longer need just because they are rent-controlled.
On the other hand, the propositions “The erection of tariffs and quotas are preferable to free trade” and “Taxing polluters will never help to protect the environment” go against prevailing economic views. Most economists favor free trade because it allows countries to specialize in producing goods efficiently, increasing overall welfare. Similarly, many economists support taxing polluters through mechanisms like carbon taxes, which use price signals to internalize environmental costs and encourage cleaner behavior.
Thus, while economists may differ in opinions on many issues, a large majority agree that rent control policies, although well-intentioned, often lead to harmful effects on urban housing markets, making “Rent controls can ruin a city” the proposition with the highest likelihood of consensus.
