1. Discuss the preconditions necessary for the smooth functioning of the market system. 2. Does the existence of a shadow or ‘black’ economy imply that the price system is not working? Is its...

1. Discuss the preconditions necessary for the smooth functioning of the market system.

2. Does the existence of a shadow or ‘black’ economy imply that the price system is not working? Is its existence consistent with the laws of demand and supply?

3. Discuss what you would consider to be the main determinants of demand and supply of rented apartments. Suppose the government decides that rents are too high and sets a maximum rent. What would you expect the consequences of this action to be for (a) apartment owners, (b) existing renters, and (c) future renters?