Which of the following sets of events must cause an increase in the price of a new house?
A)higher wages for carpenters,higher wood prices,increases in consumer incomes,higher apartment rents,increases in population,and expectations of higher house prices in the future
B)lower wages for carpenters,lower wood prices,increases in consumer incomes,higher apartment rents,increases in population and expectations of higher house prices in the future
C)lower wages for carpenters,higher wood prices,decreases in consumer incomes,higher apartment rents,decreases in population and expectations of higher house prices in the future
D)higher wages for carpenters,lower wood prices,decreases in consumer incomes,lower apartment rents,decreases in population and expectations of lower house prices in the future

Question

Quizplus · Accepted Answer

Higher wages for carpenters and higher wood prices will increase the cost of building new houses, which will lead to an increase in the price of a new house. Increases in consumer incomes will increase the demand for houses, which in turn will also increase the price. Higher apartment rents may also encourage people to consider buying a house instead, which will also increase demand and, therefore, prices. Increases in population will lead to greater demand for housing, again driving up prices. Expectations of higher house prices in the future may also lead to an increase in demand and prices as people rush to buy before prices get too high.

Which of the Following Sets of Events Must Cause an Increase