Question 4 a. Discuss how each of the major exogenous factors that shape aggregate demand for rental office space in a city must have been affected by the coronavirus crisis, and what impact this effect would have on demand for rental office space.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
Question 4
a. Discuss how each of the major exogenous factors that shape aggregate demand for
rental office space in a city must have been affected by the coronavirus crisis, and
what impact this effect would have on demand for rental office space.
b. You are provided with the following information about your city:
Total population 2020 = 85,000
Median household income 2020 = € 36,000
Average household income 2020 = € 42,000
Sales of clothes and shoes per square meter in 2020 = € 2,340
Make whatever assumptions are needed and estimate the total required square
meters of clothing and shoe stores in your city in 2021. Show clearly and explain
all the formulas and assumptions that you use for your calculations.
b. Explain why the number you have calculated in (b) for the required square meters
of clothing and footwear stores in your city is not very accurate and explain what
additional data you should use for a more accurate calculation. How will this
additional data contribute to a more accurate calculation?
c. Calculate the net absorption of office space and describe how the total demand for
offices in this market has changed each year in the table below.
2017
2018
2019
2020
Total stock of office space sq.m
752,000
98,000
779,600
76,432
814,300
88,420
843,500
49,150
Vacant stock of office space sq.m.
Transcribed Image Text:Question 4 a. Discuss how each of the major exogenous factors that shape aggregate demand for rental office space in a city must have been affected by the coronavirus crisis, and what impact this effect would have on demand for rental office space. b. You are provided with the following information about your city: Total population 2020 = 85,000 Median household income 2020 = € 36,000 Average household income 2020 = € 42,000 Sales of clothes and shoes per square meter in 2020 = € 2,340 Make whatever assumptions are needed and estimate the total required square meters of clothing and shoe stores in your city in 2021. Show clearly and explain all the formulas and assumptions that you use for your calculations. b. Explain why the number you have calculated in (b) for the required square meters of clothing and footwear stores in your city is not very accurate and explain what additional data you should use for a more accurate calculation. How will this additional data contribute to a more accurate calculation? c. Calculate the net absorption of office space and describe how the total demand for offices in this market has changed each year in the table below. 2017 2018 2019 2020 Total stock of office space sq.m 752,000 98,000 779,600 76,432 814,300 88,420 843,500 49,150 Vacant stock of office space sq.m.
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Housing Foreclosure Rate
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education