Diallo.ECON195 - ePortfolio

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Bryant & Stratton College *

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Economics

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Feb 20, 2024

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ECON195 – Macroeconomics Final ePortfolio Submission Template Fanta Diallo Bryant & Stratton College ECON195 – Macroeconomics Dr. Sushma Shukla June 1, 2022 Scenario 1 Findings and Analysis To: Audit Department From: Fanta Diallo Date: June 1, 2022 RE: Maintenance Cost Explanation B.

ECON195 – Final ePortfolio Submission Template 2 When demand increases and shifts to the right, the new equilibrium position is at point B At this point, the equilibrium quantity has increased, and the equilibrium price has also increased. The non-price determinants that would cause the demand to increase would be an increase in construction projects so that the users demand more construction screws, an increase in income that would make the consumers demand more furniture and other goods that requires the use of screws so it increases the demand and, a decrease in the price of complementary goods such as nuts, and bolts would also increase the demand for screws. C When supply decreases and shifts to the left, the new equilibrium position is at point D At this point, the equilibrium quantity decreases but the equilibrium price level increases The non-price determinants that would cause the supply to decrease are: an increase in wages of the workers would cause the cost of production to increase and the firms to supply fewer units, when government taxes the goods, the producers would decrease the supply and when there is a recession, the overall production decreases which decrease the suppl. D The final equilibrium is at point D in the market. Since the increase in demand caused the price and quantity to increase but the decrease in supply causes the price to increase further but the demand is back to its initial level. So, the consumers are now paying more for the same quantity. Scenario 2 Findings and Analysis To: Office of the Mayor From: Fanta Diallo Date: June 1, 2022 RE: Impact of Rental Control

ECON195 – Final ePortfolio Submission Template 3 When the price ceiling is imposed in the market, the quantity demanded increases to 1250 from 1000 and the quantity supplied decreases to 750 from 1000. So, there is a shortage of 1250-750 = 500 housing units in the market now. Also, there would be a deadweight loss as the quantity transacted decreases from 1000 to 750. Market failure can be caused by a lack of information, market control, public goods, and externalities. Market failures can be corrected through government intervention, such as new laws or taxes, tariffs, subsidies, and trade restrictions Two other alternatives to the rent ceiling would be Provide subsidies to the consumers and producers and bear the cost as providing subsidies would lower the rent that the consumers pay and increase the rent that the producers receive. Another method would be to build the affordable low-cost units themselves and reserve them for the economically backward section and low-income groups.

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