MICROECONOMIC PRINCIPLES

Q1. Illustrate a housin" rel="nofollow">ing rental market of a hypothetical city MQ with an effective rent ceilin" rel="nofollow">ing usin" rel="nofollow">ing a diagram of supply and demand. Label consumer surplus, producer surplus, search cost and deadweight loss. (4 mark) Q2. Usin" rel="nofollow">ing a separate diagram, show the impact of population growth on the housin" rel="nofollow">ing rental market in" rel="nofollow">in MQ. Show the change in" rel="nofollow">in the black market price. Show the change in" rel="nofollow">in the quantity traded in" rel="nofollow">in the market. (2 mark) Q3. Given population growth from Q2, explain" rel="nofollow">in the changes in" rel="nofollow">in consumer surplus, producer surplus, search cost and deadweight loss resultin" rel="nofollow">ing from this population growth. (2 mark) Q4. Read the article “Controversial new rent-biddin" rel="nofollow">ing app ‘a threat to affordability” as lin" rel="nofollow">inked here: http://www.news.com.au/fin" rel="nofollow">inance/real-estate/controversial-new-rentbiddin" rel="nofollow">ing-app-a-threat-toaffordability/news-story/9b613807f501927e93b3c1c90e83b07d Suppose Rentberry is launched in" rel="nofollow">in MQ. Discuss whether this can improve efficiency of the housin" rel="nofollow">ing rental market based on search costs and consumer surplus you illustrated in" rel="nofollow">in Q1. (2 mark) Q5. Discuss whether Rentberry can improve fairness of the housin" rel="nofollow">ing rental market. (2 mark)