Economics



Item Name

If our model of rent control allowed for unrestricted subletting, who would end up getting apartments in the inner circle? Would the outcome be Pareto efficient?

If people have different reservation prices, why does the market demand curve slope down?

In the above example, what would the equilibrium price be if there were 24 apartments to rent? What if there were 26 apartments to rent? What if there were 25 apartments to rent?

In the text we assumed that the condominium purchasers came from the inner-ring people—people who were already renting apartments. What would happen to the price of inner-ring apartments if all of the condominium purchasers were outer-ring people—the people who were not currently renting apartments in the inner ring?

Suppose now that the condominium purchasers were all inner-ring people, but that each condominium was constructed from two apartments. What would happen to the price of apartments?

Suppose that there were 25 people who had a reservation price of $500, and the 26th person had a reservation price of $200. What would the demand curve look like?

Suppose the demand curve is D(p) = 100 − 2p. What price would the monopolist set if he had 60 apartments? How many would he rent? What price would he set if he had 40 apartments? How many would he rent?

If the income of the consumer increases and one of the prices decreases at the same time, will the consumer necessarily be at least as well-off?

If the price of good 1 doubles and the price of good 2 triples, does the budget line become flatter or steeper?

Originally the consumer faces the budget line p1x1 + p2x2 = m. Then the price of good 1 doubles, the price of good 2 becomes 8 times larger, and income becomes 4 times larger. Write down an equation for the new budget line in terms of the original prices and income.