a. Beginning in 2006, the price of housing started to decline. It stopped declining in 2012. During this period, the quantity of new homes built also declined. If only one curve shifted to cause this result, which one was it: demand or supply? How did it shift?
b. Since 2012, the price of homes has gone up and the number of new homes has gone up. If only one curve shifted to cause this event, which curve shifted and how? Suppose, given the vertical shift in this curve, some markets only had a small number of new homes built. What can be inferred about the slope of the supply curve in these markets?