What can you infer about the level of quality

Assignment Help Macroeconomics

Reference no: EM131439828

Assignment: Principles of Economics

Activity: Use Supply and Demand to Evaluate Events

Activity Description

Assume that the City Council in Prescott, AZ is considering implementing price ceilings on rental units based on the number of bedrooms in the unit. The demand function for rental units (on a single bedroom equivalent basis) is given by Q_D = 120 - 4P and the supply function is given by Q_S = 2P, where P is price and Q is quantity. The Council is giving consideration to imposing a ceiling price on rental units of P_max = 16.

1. Using the given functions, draw a corresponding demand curve and a supply curve. Properly label the equilibrium price and quantity. Then show what will happen to equilibrium if the City Council imposes a price ceiling at 16. (There are numerous guides online that demonstrate how to draw supply and demand curves; most are done in Excel and then you can copy and paste the graph into your word document where you will write out answers to the following questions).

2. Are consumers of rental-housing in Prescott well-served by this price ceiling policy? Provide a careful economic analysis in support of your claim.

3. Suppose that the Council is concerned that landlords will allow the quality of their rental units to deteriorate following the imposition of the ceiling price. What can you infer about the level of quality that landlords provision if consumers are worse off following the imposition of the ceiling price? Provide a careful economic analysis in support of your claim.

4. Suppose now that the proposal before the City Council contemplates imposing a price ceiling on apartment rentals but not on house rentals. Would owners of rental houses in Manhattan be likely to support this proposal, or would they prefer the status quo (i.e., no price ceilings)? Provide the economic rationale for your answer. (In answering this question, you should ignore all supply-side considerations. In other words, just assume that supply adjusts fully to accommodate demand).

Next, find 2 recent scholarly articles concerning proposals to increase the minimum wage in the U.S. Using a supply, demand and, in this case, price floor analysis similar to what you did for the rental unit price ceiling, write a 1-2 page analysis, based on sound economic principles, of the proposal.

Note: To create supply and demand curves, solve for equilibrium and discuss what happens if a regulated price is set that is not equal to the equilibrium price.

To create the demand curves that you need for this assignment, create an excel file with a price column including prices from $1 to $30. Using the formulas, then compute quantity demanded for each price and quantity supplied for each price. Finally, using the links above, create the graph.

Length: 3-5 pages not including title page and references

Your response should demonstrate thoughtful consideration of the ideas and concepts presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.

Upload your assignment using the Upload Assignment button below.

Learning Outcomes

Use supply and demand curves for microeconomic and macroeconomic analysis.

Resources

Articles

Winn, A., Parente, M., & Porter, M. (2016). Seller beware: Supply and demand reduction and price manipulation in multiple-unit uniform price auctions.
https://proxy1.ncu.edu/login? url=https://search.ebscohost.com/login.aspx? direct=true&db=bth&AN=112815071&site=eds-live

Reference

Economics @ ITT 92009). Graphing Supply and Demand Curves in Excel.

https://ittecon.wordpress.com/2009/03/19/graphing-supply-and- demand-curves-in-excel/

Macroeconomics (2014). https://www.khanacademy.org/economics-finance- domain/macroeconomics

Solving for equilibrium price and quantity mathematically https://www.youtube.com/watch?v=vPRqJwjG8-Y

Supply, Demand and Market Equilibrium (2013). https://www.khanacademy.org/economics-finance- domain/microeconomics/supply-demand-equilibrium

University of Sussex IT Services (20160. How do I create a 'Supply and Demand' style chart in Excel? https://www.sussex.ac.uk/its/help/faq?faqid=2227

Reference no: EM131439828

Questions Cloud

What line items reflected the largest-percentage increases : What line items reflected the largest-percentage increases and/or decreases? What is the financial impact these changes have on the company's financial viability currently and in the future?

Classify the constraints as bounds and limitations : Classify the following descriptions of constraints as bounds, limitations, requirements, proportional relationships, or balance constraints. Each serving of chili should contain a quarter pound of beef.

Slavery fostered the development of democratic ideas : Morgan’s work is a brilliant piece of scholarship that generally supports his ideas. I am comfortable that he made an adequate case that slavery fostered the development of democratic ideas but the evidence seems weaker that equality fostered slavery..

Explain recommended corporate strategy for selected company : Develop and explain a recommended corporate strategy for the selected company. What competitive strengths does this strategy exploit? How is the strategy different from the current strategy?

What can you infer about the level of quality : MBA5130-8: What can you infer about the level of quality that landlords provision if consumers are worse off following the imposition of the ceiling price? Provide a careful economic analysis in support of your claim.

Compose effective business reports : Compose effective business reports that are professionally written and scholarly researched and identify, select and compile information using appropriate technology and information systems

College of business students develop professionally : A university is working on opening a career center to help the College of Business students develop professionally and be placed in high profile organizations. The three main objectives of the center are: Facilitate the interaction of students and pr..

What is meant by a pro forma financial statement : What is meant by a pro forma financial statement? How are pro forma financial statements utilized in determining whether a major proposed project for the healthcare organization should be approved or not? Provide at least two examples of healthcare p..

User Account

All Pages