Question 4.1

Question 4.2

Question 5.6

These questions above must be answered

City alone had approximately one million apartments under rent control. Show the effect of a rent control law on the equilibrium rental price and the quantity of New York City apartments. Show the amount of excess demand on your supply-and-demand diagram. 5.5 If the minimum wage raises the market wage, w, but hours worked, L, fall as a result, total wage payments, wL, may rise or fall. Use supply and demand curves to show that either outcome is possible depending on the shapes (slopes) of the supply and demand curves. (Hint: With the wage on the vertical axis and hours worked, L, on the horizontal axis, wage payments equal the area of the box with a height of the equilibrium wage and length of the equilibrium hours worked.) Use the demand function and the supply function for the avocado market (given in Question 4.4) to determine how the equilibrium price and quantity change when a 554 per lb specific tax is imposed on this market. (Hint: See Figure 2.90.) 5.7 If the government collects a $1 specific tax, what share of the tax is paid by consumers and firms in each of the following cases? Explain why. (Hint: See Q&A 2.3 2.) a. The demand curve is vertical at quantity Q and the supply curve is upward sloping b. The demand curve is horizontal at price p and the supply curve is upward sloping c. The demand curve is downward sloping and the supply curve is horizontal at 42 MacBook Air S F12 * - O