Storms are activity is Sweden's most prevalent natural hazard. The storms in Gothenburgin 2013 became Sweden's second most costly natural catastrophe. To summarise, assume that the storms have just ruined poorer dwellings and assume that there are only two levels of quality, low and high.

QUESTIONS:

a) a) Forecast the effect of the storms on the equilibrium price of high-quality dwellings (homes).

• with also a drawn graph to illustrate your answer.

b) Forecast the effect of the storms on the equilibrium price of low-quality dwellings (homes).

• with also a drawn graph to illustrate your answer.

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Assume the "x" amount of high-quality dwellings is 75 in year t-1, and the falling filtering value is 20 percent. If the quantity of new dwellings is 10 per year, the

• "x" amount of high-quality dwellings in year t is [50 / 70 / 75, 85] dwellings?