Ww2 Economics Case Study Answers

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Q. 1) In the case of the WWII housing, the supply curve represents the quantity of houses that are available for use and the demand curve represents the quantity of houses that people are looking for to use. In the case of NUCOR, the supply curve represents the quantity of steel in the market that is available for use (in this case both foreign and domestic producers are suppliers) and the demand curve represents the amount of steel that is wanted by users (in this case, the US market). Equilibrium in the market for houses means that equilibrium will be at the intersection of housing demand and housing supply which will be the point where the quantity of houses supplied is equal to the quantity of houses demanded. Equilibrium is determined…show more content…
2) In the case of NYC rent controls, the price that the rent was frozen at was a signal to demanders (or renters in this case) that they were getting a product that was below the market price and should hold onto the product. If they let go and had to search for a new apartment, they would be facing a market with higher prices than they were already paying for nearly an identical product. To the suppliers, the frozen rent price was a signal that it was not in the best interest to invest in the product (by upgrading existing apartments or building new apartment buildings) because they could not recoup enough profit for the investment to pay…show more content…
3) In the case of the California water drought and shortage of the 1970s, marginal utility is gained by the demander when there is an increase in consumption of water and a loss in marginal utility of the demander when there is a decrease in consumption of water. Because of the water shortage, the proposed rationing resulted in an attempt to impose higher usage fees on those who used more than the allotted amount of water. The people who had a lower marginal utility for water did not mind that their water usage was cut back and conserved water accordingly. Those who had a higher marginal utility for water did not mind paying a higher price for the scarce resource because the added satisfaction that they got from using an additional unit of water was greater to them than the cost of paying for it
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