1. Oftentimes, to be considered for a job, you have to know someone in the firm. What does this observation tell you about the wage paid for that job?
2. In the early 2000s, the demand for housing increased substantially as low interest rates increased the number of people who could afford homes.
a. What was the likely effect of this on housing prices? Demonstrate graphically.
b. In 2005, mortgage rates began increasing. What was the likely effect of this increase on housing prices? Demonstrate graphically.
c. In a period of increasing demand for housing, would you expect housing prices to rise more in Miami suburbs, which had room for expansion and fairly loose laws about subdivisions, or in a city such as San Francisco, which had limited land and tight subdivision restrictions?