1. In many crowded urban neighborhoods, rents can be quite costly. One way to deal with this is to establish rent controls - i.e., capping the rent at a level that can be well below the "equilibrium" level. Is this afairly easy way to provide affordable, quality housing in suchneighborhoods?Elucidate.
2. What is the relevance of the price elasticity of demand (Ed) and the price elasticity ofsupply (Es)?Explain.
3. Discuss the relevance of the income elasticity of demand and the cross-price elasticityof demand.
4. For alineardemand curve, the slope (rise/run, or change in price/change in quantitydemanded, or P / Qd) remains constant.Does this mean that the price elasticity ofdemand also remains constant along this same demand curve?Elucidate.
5. The equation for a demand curve isP = 48 - 3Q.Calculate the elasticity when moving froma quantity of 5 to a quantity of 6?Show your work.Based on your answer, is this segment ofthe demand curve elastic or inelastic?Explain.