Demand: Why Is Housing Hurting?’ of October 18, 2011, posted on the Wall Street Journal, the author, Mr. Nick Timiraos, questions the forces bringing about the supply-demand imbalance and confusion. The author starts by exclaiming,…
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He also traces the confusion to the non-availability of attractive homes at many parts of the country, a case that is making the available buyers lack the houses they could want for purchase.
This view was however challenged, by chief Economist Paul Dales, arguing that, since 30 years back, there has been an excess supply of one million homes, available to be traded. He further cites the poor economic situation, as the cause for the decreased level of home purchases in the past. The author cites another problem, which could be hampering the supply-demand stability of the home market, as the acutely decreasing home prices. From the different accounts, the debate ends with no clear definition of the problem facing the homes’ market in the U.S (Timiraos 1). However, the author integrates the different versions of the explanations, into the causes for the confusion facing the US homes’ market. These include the availability of many homes at the wrong places, where customers are not willing to buy, which is the result of the housing boom; the overpricing of the many homes available for sale – an effect of the declining inventory; and the short sale cases, which make up the bigger part of the market.
The economic concepts illustrated through the information include the concept of demand, where the shifts in the demand curve are depicted through the changing preferences of buyers, where the case is that, despite the availability of about a million homes for sale, the buyers cannot find the homes they want to purchase. In the area of buyer expectations, the buyers are not willing to buy the homes, which are located at the far-flung locales. The concept of demand is clearly depicted through the case of the inflated home prices, of the homes that are available for sale, as a result of the declining inventory. This case is thus, leading to decreasing demand, in response to the increased prices. The
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The comparison is carried out between these two factors. In the ratio of Ann’s to peter’s case, Ann has a lower utility function than peter because peter is on medication. The amounts that peter will spend on medication makes him more vulnerable in spending.
Microeconomics is therefore the study of how firms, individual, and households allocate the resources at their disposal to satisfy their limitless and recurrent need. Since resources are limited, it is important for the consumers to rank their demands and wants in the order of preferences.
vaccinations against infectious diseases). Briefly suggest how government might intervene to correct this under-provision? 5 (C) The Consumer Price Index (CPI) is the official measure of inflation in the United Kingdom. Why might CPI not be an accurate measure of the costs of living for any given individual consumer?
Therefore the author has termed Google as being operating as a monopoly in the search market. The author refers that Google has been dominantly playing its role in the search market and is this dominance is favored by governments as they are not placing any restrictions on the practices adopted by Google.
Normally, when a good has high demand with a given supply, the price for the same tends to come up and when it is demanded by a few, the price tends to come down. But, it is to be noticed that this relationship between price, demand and supply do not hold good always.
Short run equilibrium of a firm can be derived based on the total revenue and total cost and marginal revenue and marginal cost and marginal revenue and marginal cost. As firms are price-takers, each firm in an industry tries to maximize its profit by adjusting the output to a level where Marginal Cost (MC) =Marginal Revenue (MR).
without making anybody else worse off.” From this rationale economists have deduced the conceptions of Pareto improvement and Pareto optimality which is otherwise know as Pareto efficiency. A condition is believed Pareto-optimal if it is not possible to make additional
Individual consumer’s focuses on maximizing their utility subject to their budget line (MagrabI, 1991). On the other hand, producer’s aims at maximizing their profits subject to their production Isoquants (Mceachern,
However, inflation and unemployment issue tend to be a more critical due to their adverse impact in an economy. Inflation entails a persistent rise in services and commodity while unemployment is an economic
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