Q1. Illustrate a housing rental market of a hypothetical city MQ with an effective rent ceiling
using a diagram of supply and demand. Label consumer surplus, producer surplus, search
cost and deadweight loss. (4 mark)
Q2. Using a separate diagram, show the impact of population growth on the housing rental
market in MQ. Show the change in the black market price. Show the change in the quantity
traded in the market. (2 mark)
Q3. Given population growth from Q2, explain the changes in consumer surplus, producer
surplus, search cost and deadweight loss resulting from this population growth. (2 mark)
Q4. Read the article “Controversial new rent-bidding app ‘a threat to affordability” as linked here:
http://www.news.com.au/finance/real-estate/controversial-new-rentbidding-app-a-threat-toaffordability/news-story/9b613807f501927e93b3c1c90e83b07d
Suppose Rentberry is launched in MQ. Discuss whether this can improve efficiency of the
housing rental market based on search costs and consumer surplus you illustrated in Q1. (2
mark)
Q5. Discuss whether Rentberry can improve fairness of the housing rental market. (2 mark)