Use Supply and Demand graphs to illustrate the labor market and also the housing market in a given location. For each problem below provide a brief explanation and illustrate using a graph. What will happen to the price and quantity of housing units if housing supply is very inelastic? Use a housing market graph to illustrate. Very briefly, how might housing policy need to differ in these two locations to accommodate the increase in population caused by the productivity improvement? If instead of a productivity increase, your community experiences an increase in amenities. How will that change impact your labor market and your housing market? How are the comparative statistics in the labor and housing markets the same or different from the case of a productivity increase?

Inelastic supply means that the quantity supplied doesn't change much with the price. In the context…

Answered: What will happen to the price and…

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter12: The Supply Of And Demand For Productive Resources

Section: Chapter Questions

Problem 7CQ

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Use Supply and Demand graphs to illustrate the labor market and also the housing market in a given location. For each problem below provide a brief explanation and illustrate using a graph.
1. What will happen to the price and quantity of housing units if housing supply is very inelastic? Use a housing market graph to illustrate.
1. Very briefly, how might housing policy need to differ in these two locations to accommodate the increase in population caused by the productivity improvement?
1. If instead of a productivity increase, your community experiences an increase in amenities. How will that change impact your labor market and your housing market? How are the comparative statistics in the labor and housing markets the same or different from the case of a productivity increase?

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