ESSENTIALS OF ECONOMICS
11th Edition
ISBN: 9781260225334
Author: SCHILLER
Publisher: RENT MCG
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Question
Chapter 3, Problem 2P
To determine
(a)
The initial equilibrium rent per month.
To determine
(b)
The amount of shortage.
To determine
(c)
The post-hurricane equilibrium rent.
To determine
(d)
The pre-hurricane
To determine
(e)
The post-hurricane equilibrium quantity.
To determine
(f)
The post-hurricane shortage at pre-hurricane equilibrium rent.
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Students have asked these similar questions
Housing policy analysts debate the best way to increase the number of housing units available to low-income households. One strategy-the demand-side strategy-is to provide people with housing vouchers, paid by the government, that can be used to rent housing supplied by the private market. Another-a supply-side strategy—is to have the government subsidize housing suppliers or to build public housing. Using supply and demand curves, think about the market outcomes of the supply-side and demand-side strategies. Which side do you support? Explain why.
A low-income country decides to set a price ceiling on bread so it can make sure that bread is affordable to the poor. The conditions of demand and supply are given in Exhibit 10. What are the equilibrium price and equilibrium quantity before the price ceiling? What will the excess demand or the shortage if the price ceiling is set at $2.40? At $2.00? At $3.60?
Price
Qd
Qs
$1.60
9,000
5,000
$2.00
8,500
5,500
$2.40
8,000
6,400
$2.80
7,500
7,500
$3.20
7,000
9,000
$3.60
6,500
11,000
$4.00
6,000
15,000
Exhibit 10. Demand and Supply of Bread in Low-Income Country
Use the graph below to answer the following questions:
Price
$15
Supply
$14
$13
$12
$11
$10
Demand
25
75
125
175
225
275
Quantity
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