QuestionQ1) Using separate diagram for each event, explain and illustrate how each event ceteris...

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QuestionQ1) Using separate diagram for each event, explain and illustrate how each event ceteris paribus will affect the supply curve, demand curve, equiliium price and quantity in the home housing market in Australia. • The Australian government increases the number of visas for overseas migration to Australia. • Cost of materials for housing construction has increased. • An increase in the price of houses. • Property construction companies expect a continued surge in house prices. • An increasing number of single people living alone. Q2) Housing affordability has always been a critical issue in Australia. • If the Australian government implements rent control in an attempt to reduce homelessness in the country, explain and illustrate using a diagram the difference between a binding and non-binding rental rate. • Ceteris paribus, what do you anticipate would be the outcome in the housing market as a result of this rent control? Explain and illustrate using a diagram.

Komalavalli · Accepted Answer

Q1)
Diagram illustrating the Australian government increases the number of visas for overseas migration to Australia
From above diagram the point E represents the situation of Equilibrium before the intervention of government with price P and quantity Q. The demand for houses increases after the government intervenes by increasing the number of visas. This shifts the demand curve from D to D1, new equilibrium will be E1 with increase in price P1 and increase in quantity Q1.
Diagram illustrating Cost of materials for housing construction has increased in Australia.
From above diagram the point E represents the situation of Equilibrium before the intervention of government with price P and quantity of house Q. The supply for houses decreases after the cost of housing construction has increased. This shifts the supply curve from S to S2, new equilibrium will be E1 with increase in price P2 and decrease in quantity Q2.

Question Q1) Using separate diagram for each event, explain and illustrate how each event ceteris paribus will affect the supply curve, demand curve, equilibrium price and quantity in the home housing...

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