Draw the demand curve and supply curve for the Australian home housing market in 2020 showing the price elasticity of each curve in your diagram. Is there a difference in the price elasticity between the demand curve and supply curve in this home housing market? Provide a rationale for the price elasticity of each curve in your diagram. (Note: Calculations of price elasticities and actual data on demand and supply are not required for drawing the curves).

You are to answer the below sub-questions on how each event would affect the home housing market in Australia.

Treating each sub-question as a separate event and using separate diagram for each separate event, explain and illustrate how each event ceteris paribus will affect the supply curve, demand curve, equilibrium house prices and quantity in the home housing market in Australia:

i) An increase in the cost of construction materials due to supply chain bottlenecks and soaring prices for key inputs such as fuel and electricity.

ii) A significant increase in interest rate on the home loan.

iii) An increase in the migration of overseas skilled workers into Australia.

iv) State and local governments are releasing new lands for housing development.

v) More and more young adults are returning to their parents’ homes to stay with them or staying with parents for a longer period.