Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please include relevant graphs tables formulas, need it in 20 minutes The Hong Kong Government adopted certain measures to suppress the speculation on the properties

Please include relevant graphs tables formulas, need it in 20 minutes

The Hong Kong Government adopted certain measures to suppress the "speculation" on the properties (apartments) in Hong Kong.Let's assume these measures effectively decrease the "Demand for Properties for Sales" in Hong Kong.Then, we have the following observations:

"Despite the decrease in the "Demand for Properties for Sales," we cannot observe a significant drop in the market price of Hong Kong properties, but we can observe a sharp reduction in the quantity transacted in the market."

Question:

a) Use the Demand-Supply framework with graph(s) to explain the above observations.Please be careful with the reasonableness of the assumptions you used for the characteristics of the demand curve and supply curve. (8 points)

At the same time, we also observe:

"The rental market of apartments in Hong Kong becomes very "hot" in terms of a significant increase in quantity transacted."

Question:

b) Use the Demand-Supply framework with graph(s) to explain the above observations.Please be careful with the reasonableness of the assumptions you used for the characteristics of the demand and supply curves. (8 points)

Another observation:

"In Hong Kong's apartment rental market, the tenants and the landlords usually split the real-estate agency fee (each pays half of the monthly rental price).On the other hand, in some cities, the tenants pay the entire agency fee, e.g. in Beijing."

Question:

c) So in Beijing, the landlords get the real-estate agency service for free, while the practice in Hong Kong is fair as the tenants and landlords share the agency fee. Do you agree with the above statement? Explain. (10 points)

*Real-estate agency fee is the fee charged by the real-estate agents for their services provided.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Economic Consequences Of The Peace

Authors: John Maynard Keynes

1st Edition

1420905856, 9781420905854

More Books

Students also viewed these Economics questions

Question

Do you have little or no interest in your work? 202-3

Answered: 1 week ago

Question

Contrast intrinsic motivation with extrinsic motivation.

Answered: 1 week ago