This assignment will help your students apply the theory of price controls to a real-world situation. The January 2025 wildfires in Los Angeles destroyed a large number of homes, leaving many Angelenos in immediate need of housing–likely via the rental market. Meanwhile, California politicians pledged aggressive enforcement of the state’s price gouging laws, which prohibit large increases in rent following a natural disaster.
Your students will first read a short news article on the fires and early impacts on the housing market. Then they will explore the event through the lens of supply, demand, and equilibrium, and finally consider the likely impact of the state’s price ceiling law.
This downloadable worksheet includes an answer key.
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