What has the booming economy done to the market

Assignment Help Business Economics
Reference no: EM131246016

For each problem, answer the question in words and graphically. Try to explain things so that someone unfamiliar with economics could understand.

Part II: Assume that New York City’s economy has made a comeback. That and other trends have resulted in more rich people and more extremely rich people in New York City (NYC). However, assume that at the same time income inequality has increased so much that people at the very bottom become worse off. If you decide to make any assumptions in order to answer the questions, make sure that your assumptions are reasonable and noted in your answers. Discuss changes in price and quantity.

1. What has the booming economy done to the market for renting apartments in NYC? Illustrate in a supply and demand diagrams from before the boom (= initial state) to during the boom (= final state). Explain in words what effect the boom had and why.

2. Remember that with a supply and demand analysis, the product being analyzed can be defined with many levels of aggregation. Now disaggregate the market for renting apartments and consider the effects of the booming economy markets on luxury apartments and on “bare bones” apartments separately. (Assume there are also middle range apartments but ignore them in your analysis.) For now, consider justthe direct effects of the NYC economy on each. Illustrate in two side-by-side supply-and-demand diagrams (one for luxury, one for bare bones) and explain in words.

3. Now consider how the two real estate markets - luxury apartments and bare bones apartments – interact. Given what you found about how prices change in problem 2, how do you think landlords will react and what will happen to the supply of rental housing in each market? Again, illustrate in two side-by-side supply-and-demand diagrams and explain in words.

4. Now consider the labor market for cleaners and other who work in service for the rich. How will that labor market have been affected by the growing ranks of the very wealthy in NYC? Describe in words and illustrate in a supply-and-demand diagram for service labor, both before (= initial state) and during the boom (= final state).

5. Now consider how the effects of the service labor market have affected the market for bare bones apartments. Illustrate in a supply-and-demand diagram and explain in words.

6. Illustrate in a composite diagram for the market for bare bones apartments, the combined effects of (2), (3) and (5), showing both before (= initial state) and during the boom (= final state). Explain your diagram in word.

Reference no: EM131246016

Questions Cloud

Craft concise and convincing policy statement on trade : Candidates Weaponize Free-Trade Issue, Politico. Why Critics of Free Trade are Talking China, Not NAFTA, FiveThirtyEight. Economists Actually Agree on This: The Wisdom of Free Trade, New York Times. After reading each of the articles, you will play t..
Making sure to label all axes and intercepts : The city of Detroit charges its residents 50 cents for the each of the first 100 gallons of water. For each gallon over 100, and under 200 gallons, the city charges $1.00 per gallon. For each gallon over 200 gallons, the city charges $2.00 per gallon..
Impact the equilibrium condition of world petroleum market : Solar and wind or water power energies are the substitutes to fossil fuels (e.g. petroleum). In the 21st century, with environmental concerns, the environmental advocates emphasize the consumption of ‘clean’ energy to save our planet. what would such..
Inflation redistributes income : Your readings argue that inflation “redistributes income” in ways that are not necessarily fair or equitable. Some individuals or companies are much more vulnerable to the effects of inflation than others. Some people and companies have the ability t..
What has the booming economy done to the market : Assume that New York City’s economy has made a comeback. That and other trends have resulted in more rich people and more extremely rich people in New York City (NYC). What has the booming economy done to the market for renting apartments in NYC?
Depreciation on equipment totaled : Prepare the necessary adjusting entries at December 31, 2015, for the Jasper Company for each of the following situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded. Depreciation on equip..
Consider representative firm that produces using capital : Consider a representative firm that produces using capital (K) and labor (N), but that owns no capital. The firm can hire workers in the labor market at a wage w and can rent capital market at a rental rate r (that is, the firm can rent K units of ca..
What would happen if countries curtailed or stopped trading : Why do countries trade with each other? What would happen if countries curtailed or stopped trading? Read an article about the current fight over the TPP free trade pact that is before Congress.
Explain how a conviction changes probationer : Explain how a conviction changes a probationer/parolee’s legal status with regards to searches, the exclusionary rule, and Miranda warnings. Use appropriate court decisions to support your response. Identify the advantages and disadvantages of probat..

Reviews

Write a Review

Business Economics Questions & Answers

  Obtained for the market demand for cereal

The following estimates have been obtained for the market demand for cereal In Q= 9.01- 0.68 In P+0.75In A-1.3M, where Q is the quantity of cereal, P is the price of cereal, A is the level of advertising and M is income.

  Profit from sale of products to four-square to remodel

Four-Square Construction Company enters into a contract with Ben to remodel Carol's Home Store, using products from Delta Building Supplies. Eatery Café is next to Carol's Home Store. The remodeling is a gift from Ben to Carol. Delta will realize a p..

  What is the standard error of the price coefficient

In the Managerial? Solution, we estimated a focus? group's demand curve for iTunes downloads. The estimated coefficient on price was negative 413−413?, and the? t-statistic was−12.8. Using these? values, what is the standard error of this estimated? ..

  Economic crisis affected the position of global economy

The United States has gone through a prolonged recession since 2007. How has this economic crisis affected the position of the United States in the global economy?

  How the business cycle affects supply and demand

As a manager, it is important to understand how the business cycle affects supply and demand, prices, and how economic shocks will impact your company's markets, supply chain, and financing.

  Suppose an individual faces employment risk

Suppose an individual faces employment risk of the following form: Her employment is subject to business cycles in which she faces the risk of a layoff with probability 10%. When she is employed, she receives an income of $100. She earns nothing when..

  When discussing the merits of an economic policy

Appropriate policy analysis requires one to analyze when markets fail and when government fails to generate socially desirable outcomes. Briefly describe what is meant by market failure and by government failure. Why do we frequently use the nirvana ..

  What will be the equation for the new supply curve

What will be the equation for the new supply curve once the subsidy is in place - what is the new equilibrium price for this good once the subsidy is in place?

  Statements regarding the rational ignorance effect are true

Which of the following statements regarding the rational ignorance effect are true? A rationally ignorant voter may choose a political candidate based simply on party affiliation or public appearances rather the candidate's positions on a wide range ..

  Define competitive equilibrium in economy

Consider a static (one-period), closed economy with one representative consumer, one representative firm, and a government. The level of capital K and government expenditures G in the economy are both fixed exogenously. Formally define a competitive ..

  Fee levels by drawing down on its budgetary reserve

You are the superintendent of Mt. Rossmoor Community College (MRCC). Mt. Rossmoor Community College is the fifth fastest growing community college in the nation. Should the college significantly increase fees per unit, or maintain current fee levels ..

  How much money do they need to invest

Your employer has anticipated needing $60,000 in 2.5 years to finance the purchase of a new machine. IF they aniticipate making a single lump sum investment today into a saving account that will return12% interest compounded continuously, how much mo..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd