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ECON103 Problem Set 4.pdf

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Department
Economics
Course
ECON 103
Professor
Ryan Allen
Semester
Spring

Description
U NIT5Chapter 6: Problems 4, 14, 18 ECON 103 Section C100 C HAPTER 5 Problem #4: The statement that “Trade occurs when two people value different goods equally. In this sense, trade is fair because equally valued goods are being traded” is false because trades take place when goods are valued differently at the margin and has nothing to do with being “fair” but being able to maximize the gains from these trades. Problem #14: If we assume that the councilor meant to say “It will take a long time before the quantity demanded of housing equals the quantity supplied,” his economic logic is wrong in the way that he is implying that housing supplies will be “created” over time to meet the quantity in demands. However, he did not take in consideration that the quantity of rental housing is mainly affected by the trade that maximizes the surplus for both the tenants and the landlords and the
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