During the period 2006 through 2010 housing production in

Assignment Help Microeconomics

Reference no: EM13373237

During the period 2006 through 2010, housing production in the United States fell from a rate of over 2.27 million housing starts per year to a rate of under 500,000, a decrease of over 80 percent. At the same time, the number of new households slowed to a trickle. Students without a job moved in with their parents, fewer immigrants came to the United States, and more of those already here went home. If there are fewer households, it is a decline in demand. If fewer new units are built, it is a decline in supply.

a. Draw a standard supply and demand diagram which shows the demand for new housing units that are purchased each month, and the supply of new units built and put on the market each month. Assume that the quantity supplied and quantity demanded are equal at 45,000 units and at a price of $200,000.

b. On the same diagram show a decline in demand.What would happen if this market behaved like most markets?

c. Now suppose that prices did not change immediately. Sellers decided not to adjust price even though demand is below supply.What would happen to the number of homes for sale (the inventory of unsold new homes) if prices stayed the same following the drop in demand?

Reference no: EM13373237

Questions Cloud

Measuring the economys performanceprepare a analysis by : measuring the economys performanceprepare a analysis by answering the questions below. be sure to cite your references

For purposes of this question assume that the excerpts from : for purposes of this question assume that the excerpts from the powers report shown in exhibit 3 provide accurate

Q1 during the 1990s technological advance reduced the cost : q.1 during the 1990s technological advance reduced the cost of computer chips. explain with the use supply and demand

Problemyou are required to perform a project appraisal of a : problemyou are required to perform a project appraisal of a proposed new road. the road will be a dual lane by-pass

During the period 2006 through 2010 housing production in : during the period 2006 through 2010 housing production in the united states fell from a rate of over 2.27 million

Managerial economics and quantitative analysis question : managerial economics and quantitative analysis question 1after two quarters of increasing levels of production the ceo

We want to understand the determinant factors that explain : we want to understand the determinant factors that explain students performance in fifth-grade tests. we observe a

Reisner company assembled the following information in : reisner company assembled the following information in completing its march bank reconciliation balance per bank 11460

Section1 which of the following is ordinarily considered an : section1. which of the following is ordinarily considered an extended procedure in external auditors independent audits

User Account

All Pages