What is the equilibrium price before the subsidy

Assignment Help Econometrics
Reference no: EM131142474

Suppose a town decides to give a $100 subsidy to each renter to help with rent payments. Thus if initially the rent had been $1,000, with the $100 subsidy the out-ofpocket cost to the renter of a one-bedroom apartment is only $900. Using the data from Problem 9, answer each of the following questions.

(a) Using the data from Problem 9, draw the demand curve before the subsidy. How does this subsidy affect the demand for one-bedroom apartments? Draw the new demand curve after the subsidy is introduced.

(b) If the supply of apartments is fixed at 1,200 units, what is the equilibrium price before the subsidy? What is the equilibrium price after the subsidy?

(c) At the new equilibrium price, what is the out-ofpocket cost to a renter for a one-bedroom apartment?

(d) Have renters benefited from the town's rent subsidy? Have apartment owners (suppliers)?

Reference no: EM131142474

Questions Cloud

Write a paper on given book : Book: Organizational Behavior 6th Edition, by Steven McShane and Mary Von Glinow - The goal of this project is for you to utilize all of the topics you have learned throughout this course in a real world situation.
Analyze the need for waterfall and agile methodologies : Analyze the need for waterfall and agile methodologies. Explain the advantages of extreme programming (XP) and analyze the advantages of its application in high-budget short-time projects.
Explain why it difficult for person to stop drug addiction : Next, select one of the theories (biological causes, psychological causes, or sociocultural causes) and defend and support how the selected approach can explain why people use psychoactive drugs, such as the individual in this week's case study.
Why do economists find these concepts useful : What is meant by the elasticity of demand and the elasticity of supply?
What is the equilibrium price before the subsidy : Using the data from Problem 9, draw the demand curve before the subsidy. How does this subsidy affect the demand for one-bedroom apartments? Draw the new demand curve after the subsidy is introduced.
Compare the use of a dfd model with a uml activity diagram : Compare the use of a DFD model with a UML activity diagram for modeling business processes (No need to show diagrams).
How did their project plan differ from the project charter : The case study attached required to evaluate project management implementation with the following elements- Project planning, initiation, and project charter development and effectiveness.
What is the equilibrium rental for a one-bedroom apartment : Suppose 200 new one-bedroom apartments are constructed. What happens to the equilibrium rent? (c) Suppose more people move into the town, increasing the demand for one-bedroom apartments by 200 units at each price. What is the new equilibrium pric..
What are the differences between hiv and hepatitis c : What are the differences between HIV and Hepatitis C? How can HIV and Hepatitis C be prevented? Once an infection occurs, what are some specific needs of individuals living with either illness? What are some of the ethics involved in interacting w..

Reviews

Write a Review

Econometrics Questions & Answers

  Find the equilibrium price and quantity in the black market

Find the equilibrium price and quantity in the black market.

  What data will you use in your empirical work

What data will you use in your empirical work? What is the source of your data? Why is this particular data set appropriate for the study

  How large of sample is needed to ensure that the probability

The number of hours spent studying by students on a large campus in the week before final exams follows a normal distribution with a standard deviation of 8.4 hours.A random sample of these students is taken

  What is pats profit-maximizing output per hour

Pat's pizza is a prince taker. It has the following hourly costs: OUTPUT: (PIZZA PER HOUR): 0,1,2,3,4,5,6 TOTAL COST: (DOLLAR PER HOUR): 10,21,30,41,54,69,86a) If pizzas sell for $14, what is Pat's profit-maximizing output per hour What is her profit..

  How much should they invest now compounded daily

a couple just had a baby. How much should they invest now at 5.2% compounded daily in order to have $30,000 for the child's education 17 years from now Compute the answer to the nearest dollar.

  Determine the net present worth of the equipment at interest

A new piece of materials handling equipment costs $20,000 and is expected to save $7,500 the first year of operation. Maintenance and operating cost increases are expected to reduce the net savings by $500 per year for each additional year of oper..

  What could explain the absence of permit exchanges

One year later, none of the permits had been bought or sold. What could explain the absence of permit exchanges?

  What is number of hours terry would like to have for leisure

Terry utility function over leisure (i) and other goods (y) is U(y,1)+y+1*y. the associated marginal utilities are M Uy=1 +1 and M U1=y. he purchases other goods at price of $1, out of the income he earns from working.

  Would you expect an increase or decrease in total revenue

In an attempt to increase revenues and profits, a firm is considering a 4 percent increase in price and an 11 percent increase in advertising. If the price elasticity of demands is -1.5 and the advertising is +0.6 would you expect an increase or d..

  Find the down payment that you have to pay the transaction

You can afford a monthly payment of $300 for 2 years only. You want to buy a car that costs $9000. Find the down payment that you have to pay to complete this transaction, if the financial charge (interest) is 9% per year.

  How the remaining part of the essay is organized

Given this background, you might consider a recent commercial for a state lottery that stated, "We won't stop until we have made everyone a millionaire" to be deceptive and possibly unethical.

  What is the per-unit amount of the externality

You know that the water park will increase the traffic flow in the streets around the water park. There are both businesses and neighborhoods adjacent to the increased traffic flow. The cost to the community is estimated to be $6 per person. What ..

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