Question 1: Recently the local government in Shanghai has introduced a price ceiling for the sale of apartments to deal with the huge increase in prices over the last few years. Apartments that could sell in the market for 130,000 yuan (US$19,400) per square metre, now have to be sold at a price about 30 per cent lower, that is, at a price of 100,000 yuan per square metre to meet the government requirement. Source: Zhen, Summer (2017) – see link: https://www.scmp.com/business/article/2105987/shanghais- price-controls-new-homes-toughest-china-says-jinmao-chief. What effect is this likely to have on the market for apartments in Shanghai? What will happen to the quantity of apartments demanded? What will happen to the quantity supplied? Who gains? Who loses? Draw a diagram to support your answer.

Question 1: Recently the local government in Shanghai has introduced a price ceiling for the sale of apartments to deal with the huge increase in prices over the last few years. Apartments that could sell in the market for 130,000 yuan (US$19,400) per square metre, now have to be sold at a price about 30 per cent lower, that is, at a price of 100,000 yuan per square metre to meet the government requirement. Source: Zhen, Summer (2017) – see link: https://www.scmp.com/business/article/2105987/shanghais- price-controls-new-homes-toughest-china-says-jinmao-chief. What effect is this likely to have on the market for apartments in Shanghai? What will happen to the quantity of apartments demanded? What will happen to the quantity supplied? Who gains? Who loses? Draw a diagram to support your answer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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c. Suppose that a new government is elected that wants to keep out the poor. It declares that the minimum rent that landlords can charge is $2,500 per month. If the government can enforce that price floor, will there be a surplus or a shortage? (Click to select) Of how many units? Japartments per month And how many units will actually be rented each month? apartments:
= D(x) = 23 Espacio en Blanco 1: Espacio en Blanco 2: Espacio en Blanco 3: P = 1 X 20 and the price-supply equation = S(x) P = Given the price-demand equation (A) Find the equilibrium price. Answer: The equilibrium price is $ (use 2 decimal places) (B) The total gain to producers who are willing to supply units at a lower price is $ (C) The total savings to consumers who are willing to pay a higher price for the product is $ = 8+ 1 8000 (round to 2 decimal places) (use 2 decimal places)
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