This assignment will carry a double weight (the same as TWO homework or quiz assignments). If...

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This assignment will carry a double weight (the same as TWO homework or quiz assignments). If you do not do it, you will receive TWO zeros, not one. Following is a statement about a significant problem that occurred in many West Texas communities. It began around 2010 and continued for about 4 years. At the time, three possible solutions were posed by community members and leaders, and you may have your own thoughts about a possible solution of your own. You will analyze the problem and each posed solution. Choose the one you consider best or describe your own solution but you must support it with a logical argument using concepts from the course (supply, demand, price ceilings, government-funded incentives, secondary effects and other relevant markets). This will make up your original post, then you will reply to the threads of other students, again using relevant course concepts to disagree or agree. You may change your opinion as you read other students' opinions, or stick to your own conclusion. Your reply posts should be a logical statement of why you agree/disagree, not a baseless comment like "yes" or "good job". Here is the economic problem: The oil boom dramatically increased demand for housing across West Texas, which led to increased home prices and rental rates. Those who were not earning higher oilfield wages had difficulty paying the increased prices. Individuals appeared at city council meetings or petitioned local governments take action and there seemed to be three significant proposals put forth by these groups: 1. The city governments should enforce a price ceiling that would limit rent prices for apartments or homes. 2. The governments should promote construction of new housing through tax abatements (postponed payment of property taxes) or subsidize construction through reduced tax rates for a period of years. (See explanation below if you don't know understand abatements.) 3. The city governments should do nothing to interfere with the market. Wait for market forces resolve it. Nothing in the economy is an "island", but events such as the oil boom or housing cost increases are generally impacted by other every economic change so you may need to consider other factors including, but not limited to these: The increase in population brings demand for existing businesses and spurs the addition of new ones. (Did you ever think you would need to stand in line or call for reservations to eat in small "one-street" towns or even in Big Spring?) • • Unemployment was among the lowest in the nation, so demand for all workers - even minimum wage and fast-food workers - increased. Other tangent or interlinked markets may also have changed. Did any of these change the housing situation or the market in a way that affects your choice for the solution? Use what you learned in this course to evaluate the three listed "solutions". Don't limit your thoughts to the instantaneous moment, but consider secondary effects on the housing market and other "markets" in our local economies. I challenge you not to respond solely based on emotion or your personal circumstances. On the other side, don't leave out all sympathy or empathy for those you identify who may be struggling to pay bills. Try to formulate a balanced opinion and a solution to resolve the dilemma. Advocate for your conclusion by correctly applying the concepts from the course. Begin by making notes about the problem based on relevant course concepts. You must explain your analysis of why prices increased for housing. Your first post should discuss all three different proposals in light of relevant course concepts: • Supply, demand, equilibrium price and quantity Price ceilings and their impact on markets • • Private market incentives and the black market . Government-based subsidies to suppliers in the form of incentives that could encourage construction of apartments. These might be subsidies or tax abatements. (Subsidies are government payments to offset the expense of construction. Abatements are when a government entity encourages private investment in the community by allowing an individual or firm to pay reduced taxes or to delay paying the taxes for a period of time. This encourages construction because the new facility can be profitable earlier. Since abatements expire in a limited time, firms will begin construction quickly before it expires.) • Government subsidies to consumers (Some already exist in the form of US Housing & Urban Development assistance for low income earners in "HUD" housing.) • • The role of government and private property owners in private markets The income effect on the market for goods and services and other market interactions in all local markets (housing, employment, goods and services Short-term and long-term effects of the different inter-related markets and the effects of incentives (price) • Self-interest as opposed to selfishness on the part of market members Logical fallacies (failure to consider secondary consequences, the moral hazard, This assignment will carry a double weight (the same as TWO homework or quiz assignments). If you do not do it, you will receive TWO zeros, not one. Following is a statement about a significant problem that occurred in many West Texas communities. It began around 2010 and continued for about 4 years. At the time, three possible solutions were posed by community members and leaders, and you may have your own thoughts about a possible solution of your own. You will analyze the problem and each posed solution. Choose the one you consider best or describe your own solution but you must support it with a logical argument using concepts from the course (supply, demand, price ceilings, government-funded incentives, secondary effects and other relevant markets). This will make up your original post, then you will reply to the threads of other students, again using relevant course concepts to disagree or agree. You may change your opinion as you read other students' opinions, or stick to your own conclusion. Your reply posts should be a logical statement of why you agree/disagree, not a baseless comment like "yes" or "good job". Here is the economic problem: The oil boom dramatically increased demand for housing across West Texas, which led to increased home prices and rental rates. Those who were not earning higher oilfield wages had difficulty paying the increased prices. Individuals appeared at city council meetings or petitioned local governments take action and there seemed to be three significant proposals put forth by these groups: 1. The city governments should enforce a price ceiling that would limit rent prices for apartments or homes. 2. The governments should promote construction of new housing through tax abatements (postponed payment of property taxes) or subsidize construction through reduced tax rates for a period of years. (See explanation below if you don't know understand abatements.) 3. The city governments should do nothing to interfere with the market. Wait for market forces resolve it. Nothing in the economy is an "island", but events such as the oil boom or housing cost increases are generally impacted by other every economic change so you may need to consider other factors including, but not limited to these: The increase in population brings demand for existing businesses and spurs the addition of new ones. (Did you ever think you would need to stand in line or call for reservations to eat in small "one-street" towns or even in Big Spring?) • • Unemployment was among the lowest in the nation, so demand for all workers - even minimum wage and fast-food workers - increased. Other tangent or interlinked markets may also have changed. Did any of these change the housing situation or the market in a way that affects your choice for the solution? Use what you learned in this course to evaluate the three listed "solutions". Don't limit your thoughts to the instantaneous moment, but consider secondary effects on the housing market and other "markets" in our local economies. I challenge you not to respond solely based on emotion or your personal circumstances. On the other side, don't leave out all sympathy or empathy for those you identify who may be struggling to pay bills. Try to formulate a balanced opinion and a solution to resolve the dilemma. Advocate for your conclusion by correctly applying the concepts from the course. Begin by making notes about the problem based on relevant course concepts. You must explain your analysis of why prices increased for housing. Your first post should discuss all three different proposals in light of relevant course concepts: • Supply, demand, equilibrium price and quantity Price ceilings and their impact on markets • • Private market incentives and the black market . Government-based subsidies to suppliers in the form of incentives that could encourage construction of apartments. These might be subsidies or tax abatements. (Subsidies are government payments to offset the expense of construction. Abatements are when a government entity encourages private investment in the community by allowing an individual or firm to pay reduced taxes or to delay paying the taxes for a period of time. This encourages construction because the new facility can be profitable earlier. Since abatements expire in a limited time, firms will begin construction quickly before it expires.) • Government subsidies to consumers (Some already exist in the form of US Housing & Urban Development assistance for low income earners in "HUD" housing.) • • The role of government and private property owners in private markets The income effect on the market for goods and services and other market interactions in all local markets (housing, employment, goods and services Short-term and long-term effects of the different inter-related markets and the effects of incentives (price) • Self-interest as opposed to selfishness on the part of market members Logical fallacies (failure to consider secondary consequences, the moral hazard,

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In response to the economic problem of the oil boom in West Texas and its resultant effect on housing prices there are three solutions that have been ... View the full answer