Additional Required Problems Use supply and demand curves to analyze the following questions. In 1-2 sentences, explain your answer. Recall that housing supply is very inelastic while housing demand is fairly elastic. Demand for housing increases, since it becomes more convenient to commute from D.C. to Reston. Price sharply increases, quantity rises only slightly.
Price sharply increases, quantity rises only slightly.
Recall that both demand for credit and supply of credit are fairly elastic. Supply sharply decreases, since the probability of repayment is much smaller when there are no legal penalties for default. At the same time, demand increases. With unregulated interest rates, kids would just have to borrow at very high rates. Additional Problems 1.