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Hurricane Katrina Hurricane Katrina destroyed a large fraction of the housing stock of New Orleans, with relatively large losses in the low-quality market. To simplify, suppose that the hurricane destroyed only low-quality houses. a. Use a graph to show the effects of the hurricane on the markets for lowquality and medium-quality housing. b. The hurricane [increased, decreased] the equilibrium price of low-quality housing because . . . c. The hurricane [sped up, slowed down] the fi ltering process from mediumquality to low-quality markets because . . . d. The hurricane caused consumers to switch from the [low, medium] quality market to the [low, medium] quality market. e. The hurricane [increases, decreases] the price of medium quality housing because . . .
Chapter 14, Problem 9(choose chapter or problem)
Hurricane Katrina
Hurricane Katrina destroyed a large fraction of the housing stock of New Orleans, with relatively large losses in the low-quality market. To simplify, suppose that the hurricane destroyed only low-quality houses.
a. Use a graph to show the effects of the hurricane on the markets for low quality and medium-quality housing.
b. The hurricane [increased, decreased] the equilibrium price of low-quality housing because . . .
c. The hurricane [sped up, slowed down] the filtering process from medium-quality to low-quality markets because . . .
d. The hurricane caused consumers to switch from the [low, medium] quality market to the [low, medium] quality market.
e. The hurricane [increases, decreases] the price of medium quality housing because . .
Questions & Answers
QUESTION:
Hurricane Katrina
Hurricane Katrina destroyed a large fraction of the housing stock of New Orleans, with relatively large losses in the low-quality market. To simplify, suppose that the hurricane destroyed only low-quality houses.
a. Use a graph to show the effects of the hurricane on the markets for low quality and medium-quality housing.
b. The hurricane [increased, decreased] the equilibrium price of low-quality housing because . . .
c. The hurricane [sped up, slowed down] the filtering process from medium-quality to low-quality markets because . . .
d. The hurricane caused consumers to switch from the [low, medium] quality market to the [low, medium] quality market.
e. The hurricane [increases, decreases] the price of medium quality housing because . .
ANSWER:Step 1 of 6
Given data:
Hurricane Katrina Hurricane Katrina destroyed a large fraction of the housing stock of New Orleans, with relatively large losses in the low-quality market. To simplify, suppose that the hurricane destroyed only low-quality houses.
a. Use a graph to show the effects of the hurricane on the markets for low quality and medium-quality housing.
b. The hurricane [increased, decreased] the equilibrium price of low-quality housing because . . .
c. The hurricane [sped up, slowed down] the filtering process from medium quality to low-quality markets because . . .
d. The hurricane caused consumers to switch from the [low, medium] quality market to the [low, medium] quality market.
e. The hurricane [increases, decreases] the price of medium quality housing because . .