Assignment
1-Suppose the demand and supply curves for rental housing units have the typical shapes and that the rental housing market is in equilibrium. Then, government establishes a rent ceiling below the equilibrium level.
a. What happens to the quantity of housing available?
b. What happens to the quality of housing and why?
c. Who benefits from rent control?
d. Who loses from rent control?
e. How do landlords of rent-controlled apartments try to get tenants to leave?
2-What happens to the equilibrium price and quantity of ice cream in response to each of the following? Explain your answers.
? The price of dairy cow fodder increases.
? The price of beef decreases.
? Concerns rise about the fat content of ice cream. Simultaneously, the price of sugar (used to produce ice cream) increases.
3-You are an entrepreneur who wants to manufacture and sell a product in an industry where other competitors have absolute advantages but you have a comparative advantage.
A) What is comparative advantage and how can you use it to your benefit?
B) Using a product of your choice, create an example of comparative advantage.
C) How could an innovative entrepreneur transform a comparative advantage into an absolute advantage?
4-A) The new administration has hired you to develop economic incentives that would get firms to improve their levels of technology in order to boost productivity. Create and three or more incentives that you could recommend.
B) On the heals of your success in A), you are asked to outline a strategy for increasing the long term rate of economic growth in the American economy. Please outline that strategy.