House prices in Southern California reached a record median price of $505,000 in 2007 (nominal dollars)….

  1. Southern California’s median house price reached an all-time high
    Price of $550,000 in 2007 (nominal). The 2018 median price was $505,000 (nominal dollars).
    Price was $507,500 (again in nominal dollars), higher than the previous
    record. Let’s say that the CPI was 217.39 in 2007 and 256.21 for 2018.
    Which year saw the greatest real price increase in 2018 dollars, and how?
    much?

2. Let P = 40 be the product demand on the market.
0.02*Q.  The market supply curve is P = 20 + 0.03*Q.

(a) Determine the equilibrium market price and production under
The perfect competition

(b) Determine consumer’s surplus at the market equilibrium.

(c) Determine producer’s surplus at the market equilibrium.

(d). Determine the four-dollar arc elastic demand
($4.00) Increase in the market equilibrium prices (i.e. price
The price that you have determined for part will increase by four dollars
a).

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