City-wide lockdowns were implemented in Sydney by the NSW government in July-August 2021 in response to new COVID-19 cases detected in the community. This question assumes that the market for apartments in Sydney is perfectly competitive. (a) Evaluate the decision of the NSW government to double the first home buyer subsidy in terms of Pareto efficiency and fairness. (b) Now suppose the NSW government decides not to help first home buyers in Sydney any longer and removes the existing subsidy. Evaluate this decision in terms of Pareto efficiency and fairness.

City-wide lockdowns were implemented in Sydney by the NSW government in July-August 2021 in response to new COVID-19 cases detected in the community. This question assumes that the market for apartments in Sydney is perfectly competitive. (a) Evaluate the decision of the NSW government to double the first home buyer subsidy in terms of Pareto efficiency and fairness. (b) Now suppose the NSW government decides not to help first home buyers in Sydney any longer and removes the existing subsidy. Evaluate this decision in terms of Pareto efficiency and fairness.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter6: Demand Relationships Among Goods

Section: Chapter Questions

Problem 6.12P

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