一、The rent control agency of an Asian city has found that aggregate demand
is QD=160-8P. Quantity is measured in tens of thousands of apartments. Price,
the average monthly rental rate, is measured in hundreds of dollars. The agency
also noted that the increase in Q at lower P results from more three-person
families coming into the city from the rural countryside and demanding
apartments. The city's board of realtors acknowledges that this is a good
demand estimate and has shown that supply is Qs=70+7P.
a.If both the agency and the board are right about demand and supply, what
is the free market price? What is the change in city population if the agency
sets a maximum average monthly rental of $300, and all those who cannot find an
apartment leave the city?
b.Suppose the agency bows to the wishes of the board and sets a rental of
$900 per month on all apartments to allow landlords a "fair" rate of return.If
50 percent of any long-run increases in apartment offerings come from new
construction, how many apartments are constructed? (參考課本第二章第6題)
二、The table below shows the retail price and sales for instant coffee and
roasted coffee for 1997 and 1998
│ Retail price of Sales of │Retail Price of Sales of
│ Instant coffee Instant coffee │Roasted Coffee Roasted Coffee
Year │ │
────┼─────────────────┼────────────────
1997 │ 10.35 75 │ 4.11 820
│ │
1998 │ 10.48 70 │ 3.76 850
────┴─────────────────┴────────────────
a.Using this data alone. estimate the short-run price elasticity of demand
for roasted coffee.Derive a linear demand curve for roasted coffee.
b.Now estimate the short-run price elasticity of demand for instant coffee
.Derive a liner demand curve for instant coffee.
c.Which coffee has the higher short-run elasticity of demand? Why do you
think this is the case?
