Luc Duy Khanh

Student ID: 11212842

Class: EBBA 13.1

ASSIGNMENT 3
 ANSWER

1. Question 1

The graph below illustrates the demand for housing in Baton Rouge caused by
Hurricane Katrina:

Graph explanation:

- An increase in the population

of Baton Rough increases the
demand for housing, shifting
the demand curve to the right.

- The equilibrium price increases

from $130,000 (Point a) to
$156,000 (Point b).

Terms explanation:

- H1: Number of homes before the relocation of New Orleans people.

- H2: Number of homes after the relocation of New Orleans People.

It is understanded that the number of homes listed for sale was a constant number
during this time. By relocating a massive amount of population, this number
quickly decreased by 3,100 (From 3,600 homes to 500 homes). Along with the
scarcity in the number of “living places”, the price undoubtedly increased to
$16,000 (From $130,000 to $ 156,000) just in six months.
 2. Question 2

The following graph shows the market effects of people returning to New
Orleans:

Graph explanation:

- A decrease in the population of

settlers in Baton Rough lowers
the demand for housing,
shifting the demand curve to
the left.

- The equilibrium price moves

down from $A (Point a) to $B
(Point b).
Terms explanation:

- H1: Number of homes before settlers moving back to a rebuilt New Orleans.
- H2: Number of homes after settlers moving back to a rebuilt New Orleans.

The number of homes remains a constant number as people moving back to New
Orleans. Hurricane Katrina didn’t wipe out the whole country, as the demand for
housing in a small part continued to stay stable, so the demand curve will not start
from the root of the graph. During relocation time, the demand curve is predicted
to shift to the left (From point a to point b) and it is very likely that the house
pricing will decrease from $A to $B.
 ANSWER

Graph explanation:

- A decline in the population of

bees in the US (From B1 to B2)
leads to the decrease of fruits in
general, which shifts the supply
curve to the left.

- Due to the scarcity of

ingredients, the price of ice
cream will unavoidably
increase (From P1 to P2),
causes the demand curve to
shift to the left.

Terms explanation:

- B1: Number of bees before colony colapse disorder (CCD).

- B2: Number of bees after colony colapse disorder (CCD).
- P1: Price of ice cream before colony colapse disorder (CCD).
- P2: Price of ice cream after colony colapse disorder (CCD).
First off, the demand for ice cream is elastic. Bees’ diminishment gradually causes
honeybee colonies to collapse, which directly affects the number of ingredients for
ice cream making processes. Ice cream elasticity shown in this report represents
how the ice cream price affects the customers’ demands. The demand curve is
predicted to strongly shift to the left as the suppliment begins to show its scarcity
in producing products. In general, the decline of the bee population will affect the
market for ice cream in a rough way as ice cream is an elastic product.