The Market as a Model

Building the model

Equilibrium and its arithmetic

Comparative statics

Judging the allocation

Where does the demand curve $P = 1000 - 5Q$ in the housing model come from?

Population growth raises every reservation price by 100 dollars while the stock stays at 100. What is the new short-run equilibrium rent?

Construction can add apartments at 400 dollars each indefinitely. Where does the rent settle in the long run?

At the competitive rent of 500, the 100 apartments go to the 100 highest-reservation renters. Why is this allocation Pareto efficient?

With demand $P = 1000 - 5Q$ and a fixed stock of 100 apartments, compute the equilibrium rent $P^*$ in dollars, and write the number.

At the equilibrium rent of 500, compute total consumer surplus in dollars, the triangle between demand and the rent line over the 100 apartments, and write the number.

On the demand line P equals 1000 minus 5Q, what does the 40th most eager renter reserve?

With a rent ceiling of 300 dollars and a stock of 100, how many renters want an apartment?

When demand shifts up by 100 dollars with stock frozen at 100, why does rent jump exactly 100?

Why is the auctioning landlord efficient yet still troubling?

At a ceiling price of 300 dollars, compute quantity demanded from 1000 minus 300 over 5, and write the number.

With long-run construction cost of 400 per apartment, compute the eventual quantity from 1000 minus 400 over 5, and write the number.