ReviewProblems - $100. Suppose the government decides to...

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More Review Problems Eco 304K, Dr. Ledyard Question 1 Suppose P pens = 5. Derive a demand curve for markers when Income is 100. Put markers on the x-axis. Question 2 Suppose instead the price of pens changed to 10, and the price of markers is 2. Show the effects of the change in price for pens from 5 to 10. Suppose the SE>IE for markers. Clearly label the income and substitution Effects Question 3 Repeat Q3 assuming that markers are an inferior good and IE>SE. Question 4 Consider the perfectly competitive market for housing. The equilibrium price of housing is
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Unformatted text preview: $100. Suppose the government decides to put a price ceiling for housing of $150. a. What is the effect of the price ceiling in the market? (The price apartments are sold for and any surplus or shortage in the market) b. Suppose there is an earthquake that destroys half the apartments in the city. The equilibrium price is $200. What happens to the market after this if there is still a price ceiling? (New price and quantities and any shortages or surpluses.)...
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This note was uploaded on 03/18/2008 for the course ECON 304K taught by Professor Ledyard during the Spring '08 term at University of Texas at Austin.

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