The city of Pueblo, CO recently passed a bill to subsidize homebuyers by assisting with their down-payments. The new bill will give qualified homebuyers $20,000 for their down-payment. 8 Demonstrate the effect of these subsidies on the market for housing in Pueblo, and answer the questions that follow. B 19 In the graph, shift one or both curves to show the effect of the $20,000 subsidy. Price (in thousands of $) 600 590 580 570 560 550 €540 530 520 510 500 Supply Demand 04 8 12 16 20 24 28 32 36 40 44 48 52 56 60 Quantity of homes (in thousands) In the absence of government involvement in the market, the equilibrium price is the equilibrium quantity is thousand homes. As a result of the subsidy, consumers will pay thousand per home. thousand per home, and sellers will receive . Even though homebuyers receive a $20,000 subsidy for their purchase, thousand per home, and O buyers receive all of the benefits. O the amount that each side of the market benefits from the subsidy depends on the relative elasticities of buyers and sellers. O the benefits go to whoever receives the subsidy from the government. Osellers receive all of the benefits.
The city of Pueblo, CO recently passed a bill to subsidize homebuyers by assisting with their down-payments. The new bill will give qualified homebuyers $20,000 for their down-payment. 8 Demonstrate the effect of these subsidies on the market for housing in Pueblo, and answer the questions that follow. B 19 In the graph, shift one or both curves to show the effect of the $20,000 subsidy. Price (in thousands of $) 600 590 580 570 560 550 €540 530 520 510 500 Supply Demand 04 8 12 16 20 24 28 32 36 40 44 48 52 56 60 Quantity of homes (in thousands) In the absence of government involvement in the market, the equilibrium price is the equilibrium quantity is thousand homes. As a result of the subsidy, consumers will pay thousand per home. thousand per home, and sellers will receive . Even though homebuyers receive a $20,000 subsidy for their purchase, thousand per home, and O buyers receive all of the benefits. O the amount that each side of the market benefits from the subsidy depends on the relative elasticities of buyers and sellers. O the benefits go to whoever receives the subsidy from the government. Osellers receive all of the benefits.
Chapter4: Markets In Action
Section: Chapter Questions
Problem 13SQ
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Transcribed Image Text:the city of Pueblo, CO recently passed a bill to subsidize homebuyers by assisting with their down-payments. The new bill will
give qualified homebuyers $20,000 for their down-payment.
Demonstrate the effect of these subsidies on the market for housing in Pueblo, and answer the questions that follow.
B
In the graph, shift one or both curves to show the effect of the $20,000 subsidy.
600
580
570
560
IX
550
540
530
Price (in thousands of $)
F
590
520
510
500
0 4
Supply
Demand
8 12 16 20 24 28 32 36 40 44 48 52 56 60
Quantity of homes (in thousands)
In the absence of government involvement in the market, the equilibrium price is
the equilibrium quantity is
thousand homes.
As a result of the subsidy, consumers will pay
thousand per home.
thousand per home, and sellers will receive
Even though homebuyers receive a $20,000 subsidy for their purchase,
thousand per home, and
buyers receive all of the benefits.
O the amount that each side of the market benefits from the subsidy depends on the relative elasticities of buyers and
sellers.
the benefits go to whoever receives the subsidy from the government.
sellers receive all of the benefits.
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