Micro economics

Project description

After World War II local authorities in some European cities (Berlin and Frankfurt, for instance) prescribed ceilings on rental prices for city flats. The idea was to make access to appropriate dwelling space largely independent of income. Although the measures served the purpose for a while, very soon negative side-effects did appear; in particular, black markets for flats developed, and, in the longer run, inner cities residential houses got dilapidated. Use economic theory to explain the situation and the consequences that arose. Hint: Consider the incentives of landlords, rental agencies and flat-hunters. (70 marks)


Task: Answer following question, using textbooks, lecture notes and whatever source you may find appropriate (sources have to be named). Please, read the instructions on the next page about the format of the assignment very carefully and follow them meticulously.

-You are expected to write essay on question applying diagrams as far as possible to explain your arguments.
-No word limit is imposed. However, explanation should be as concise as possible.

-References (list of used books, articles, web-pages etc.) and appendices (if any) at the end. Use mainly journals if possible.
Added on 09.01.2016 11:27
the use of economic diagrams is very important as the tutor marking this is very keen on visual representation and well presented with colour codes etc.
Added on 09.01.2016 11:29
Diagrams must be describe what is happening.

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