See file attached

Q1) a
i Property market demand and supply:
If Singaporean believe that property prices will rise in the future, tend to buy more property at present which turn increases the demand for property. Consider Property market was initially at equili
ium level E* with Q* amount of property supplied at price p*. If demand for property increases, the demand curve will shift rightward to D1. Now the price will increase to P1 since Q* quantity was supplied. Due to increase in price property seller will supply more at price P1. The increase in supply in response to price will equalize the market at E1 with Q1 quantity of property supplying in the market.
ii) If government imposes Additional Buyer Stamp Duties (ABSD)
If government imposes ABSD on buying second property leads to rise in price of buying second property. The prices rise will decrease the quantity of property demanded among people. Consider Property market was initially at equili
ium level E* with Q* amount of property supplied at price p*. If demand for property decreases due to impose of ABSD, the demand curve will shift leftward to D1. Now the price will decrease to P1 since Q* quantity was supplied. Due to decrease in price property seller will cut the supply at price P1. The decrease in supply in response to price will equalize the market at E1 with Q1 quantity of property supplying in the market.
iii) If government reduces the supply of Foreign laborers.
Consider Labor market was initially at equili
ium level E* with QL* amount of Labor supplied at Wage w*. If labor supply decreases, the supply curve will shift leftward to S1. Now the wage will increase quantity of labor will decrease to QL1. since QL* quantity of labor was supplied at wage w*. Due to decrease in the supply of labor, they demand more wage tor work. The increase in wage in response to decrease in supply will equalize the market at E1 by decreasing the labor demanded in the market.
iv) If government increases the supply of land for development
Consider Land market was initially at equili
ium level E* with Q* amount of Land supplied at Price p*. If land supply increase, the supply curve will shift rightward to S1. Now the price will decrease to P1 since Q* quantity was supplied. Due to decrease in the price of land at E* People will demand more. The increase in demand in response to price change will equalize the market at E1 with Q1 quantity of land supply in the market.
) Determinants of price elasticity of demand and supply
Demand for a commodity decreases as price increases is known as Price elasticity of demand and demand for a commodity increases as price increases is known as price inelastic demand.
Housing market in Singapore: In 1970 Singapore housing market was dominated by private ownership. Structural change in housing market led to domination of public ownership in the cu
ent period. Housing Development Board of Singapore is the only authority which has a control on housing market. Determinants of housing demand are unemployment, income, supply of household, government intervention on housing market, inflation rate, price of substitute available in relative to house, real interest rate after tax.
Government intervened in the housing market by reducing the supply of houses. They also had levied stamp duties on both the buyer and seller. Here the seller pays stamp duty on selling a property and buyer pay stamp duty on buying a particular property, these kind of tax led to rise in housing prices. Due to cooling measurement taken by the government in order to avoid housing price fall due to excess supply of houses in the future, which again increases housing price for the consumer based on Additional buyer stamp duties.
By analyzing the above market situation, it was clear that Singapore housing market was price elastic in demand. Price elastic of demand is nothing but the demand responsiveness of a people to price change. By imposing stamp duties increases housing price, which led to cut in demand for house in Singapore.
c)
Income elasticity of demand measures how consumers demand changes with change in income level.
For normal good elasticity of IED will be greater than zero. If Income increases, the demand for a normal good also increases.
Inferior good IED will be less than zero indicates that if income increases the demand for an inferior good will decrease.
q= quantity of a good, I = Income
q1=3200, q2= 4800, I1=2500, I2 = 3300
Midpoint calculation of Income elasticity demand (IED)
IED = 1.45 >0, indicates that good is normal.
Revenue of property developers during recession
Recession is a period of downturn where high inflation rate coupled with rise in unemployment and business loss occurs. In property market the owner’s revenue will be affected due to high inflation rate. During a recession the input cost will rise, in order to earn revenue, the owners try to cut input costs such as labor input,
anding and advertising cost etc. Recession will also lower the stock price. Overall it will affect the revenue of a...