Question 1 - Kuala Lumpur city is the least affordable place to rent in Malaysia. KL City Hall is looking at implementing rent (price) control to help tenants pay the rent. Use diagrams to illustrate and explain the impact of imposing the rent control on the price and quantity of rental housing. Link your discussion to a determinant of price elasticity of demand.
Question 2 - Suppose that Malaysia's domestic equilibrium price of rubber in the absence of trade is below the world price. Imagine now that trade is allowed. Should Malaysia be an importing or exporting country? Discuss what changes in welfare would occur due to free trade. Who the winners and losers are from flee trade? Illustrate your answer with an appropriate diagram.
Question 3 - The local government is considering a proposal to implement a bicycle tax to raise government revenue. In this situation, who should be taxed to raise more revenue - suppliers or buyers? Who bears the burden of the tax? Provide justification for your answer, and illustrate with an appropriate diagram(s).