Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 2IP
(a)
To determine
Effect of low interest rate on house price.
(b)
To determine
The Effect of the increased mortgage rate on house price.
(c)
To determine
Effects of increasing demand for housing on house price in San Francisco.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
“A reading of consumer sentiment rose in February to its highest level in three months on an improving stock market and hopes for continued job gains, according to data released Friday morning.” (Market Watch, March 1, 2013).
The quote copied above refers to the income expectations of consumers in United States. Determine the effects this situation implies for the market for used books if they are considered inferior goods. That is, starting from an equilibrium situation, explain and graph the changes in the equilibrium in the market for used books. More specifically,
what curve (side of the market) is affected and to what direction, and
Side of the market: ___________________
Direction: __________________________
what is the change in both the equilibrium price and the equilibrium quantity.
Change in equilibrium price: ________________________
Change in equilibrium quantity: ______________________
Make sure you graph the changes in the market for both price and…
Help me please
Predict how each of the following economic changes will affect the financial market for home loans. (It may help to use a demand and supply diagram to conduct your analysis.)
Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.
Which curve will shift: supply or demand?
In which direction will the curve shift: right or left?
Briefly explain why this scenario caused this curve shift.
What will happen to equilibrium price?
What will happen to equilibrium quantity?
Chapter 4 Solutions
Microeconomics
Ch. 4.1 - Prob. 1QCh. 4.1 - Prob. 2QCh. 4.1 - Prob. 3QCh. 4.1 - Prob. 4QCh. 4.1 - Prob. 5QCh. 4.1 - Prob. 6QCh. 4.1 - Prob. 7QCh. 4.1 - Prob. 8QCh. 4.1 - Prob. 9QCh. 4.1 - Prob. 10Q
Ch. 4 - Prob. 1QECh. 4 - Prob. 2QECh. 4 - Prob. 3QECh. 4 - Prob. 4QECh. 4 - Prob. 5QECh. 4 - Prob. 6QECh. 4 - Prob. 7QECh. 4 - Prob. 8QECh. 4 - Prob. 9QECh. 4 - Prob. 10QECh. 4 - Prob. 11QECh. 4 - Prob. 12QECh. 4 - Prob. 13QECh. 4 - Prob. 14QECh. 4 - Prob. 15QECh. 4 - Prob. 16QECh. 4 - Prob. 17QECh. 4 - Prob. 18QECh. 4 - Prob. 19QECh. 4 - Prob. 20QECh. 4 - Prob. 21QECh. 4 - Prob. 22QECh. 4 - Prob. 23QECh. 4 - Prob. 24QECh. 4 - Prob. 1QAPCh. 4 - Prob. 2QAPCh. 4 - Prob. 3QAPCh. 4 - Prob. 4QAPCh. 4 - Prob. 5QAPCh. 4 - Prob. 6QAPCh. 4 - Prob. 1IPCh. 4 - Prob. 2IPCh. 4 - Prob. 3IPCh. 4 - Prob. 4IPCh. 4 - Prob. 5IP
Knowledge Booster
Similar questions
- 4. Supply and demand for loanable funds The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. INTEREST RATE (Percent) 6 5 4 32 1 0 0 100 Supply 200 300 400 LOANABLE FUNDS (Billions of dollars) Demand 500 600 4arrow_forwardIllustrate and explain how the market for milk in the US economy will maintain equilibrium over time given the problem that will exist with current demand conditionsarrow_forwardOur client is proposing to build a 300 unit apartment building in Downtown Denver which will deliver in 2022. Given the following graph showing five year supply vs demand for rental apartments in Downtown Denver, what do you think some of the implications for building a building in 2022 will be? Would you recommend they continue to plan on delivering in 2022? Why/why not?arrow_forward
- Why expectation for future prices is one of the factors that can affect supply?arrow_forwardWith the news that the construction industry is on the rise again in the U.S., the major car manufacturers are increasing production of pick-up trucks. What will happen to the supply for auto loans due to this increased production of vehicles? What happens to the equilibrium interest rate and equilibrium quantity of auto loans? Show the result of a shift in supply of auto loans on the graph below. Provide your answer below: P Demand Supply Qarrow_forwardPredict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answer. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.arrow_forward
- Suppose a state aims to make it easier for people to purchase school supplies for children by exempting these purchases from sales taxes. Such programs are often called "sales tax holidays." Identify which of the following would be considered an unintended consequence of this policy.Choose one: A. An increase in purchases just prior to and immediately following the sales tax holiday. B. An increase in prices by retailers expecting higher demand during the sales tax holiday. C. A large increase in net sales. D. A steep decline in sales during the sales tax holiday.arrow_forwardwhich makes sense to bubble in?arrow_forwardAgis Homes is one of the largest builders of new homes in the U.S. As the economist for Agis Homes, you have forecast the following for the year 2022: The price of lumber used to construct homes will increase by 25% The economy will come roaring back and personal income will increase by close to 10% Assume that the prices of new homes are determined by supply and demand. Assuming everything else is held constant: If both of these impacts occur at the same time, what do you expect to happen to the equilibrium price and quantity of new homes? Use demand and supply analysis to help explain your answer.arrow_forward
- Illustrate how the demand and supply for new homes has changed in 2023.arrow_forwardFactors affecting demand and supply are the various factors that influence the quantity of a good or service that buyers (consumers) are willing to purchase and the quantity that sellers (producers) are willing to produce and sell, respectively. Understanding the factors is important for businesses, policymakers, and consumers to make informed decisions about pricing, production, and consumption. The prediction is that global consumption of crude oil will exceed production by 20 million barrels this year, which means there will be a shortage of supply. This could lead to further price increases if demand continues to grow, which would result in higher costs for consumers and businesses. However, this imbalance is likely to be corrected over time as higher prices incentivize more production, while lower demand could lead to a reduction in consumption. Additionally, new sources of supply could come up or existing sources could increase their output in response to higher prices. In the…arrow_forwardMacroeconomics – Week #2 Assignment Demand and Supply Exercises Directions: Fill in the boxes (QD, QS, D, S, P, Q) in the next three demand and supply exercises. Based upon the event, what can we expect to occur for the market? Use a “0” (zero) if nothing will occur for that particular variable, a “+” (plus) if an increase, or a “-“ (negative) if a reduction. QD stands for Quantity Demanded, QS for Quantity Supplied, D for Demand, S for Supply, P for Price, and Q for Quantity.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
- Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning