China+Cuts+Growth+Target+to+7.5%+by+Kay

//**REMEMBER: DO NOT SUMMARIZE THE ARTICLE!**// = ** TITLE OF EXTRACT: **= Public Housing Supply Struggling to Keep Pace with Demand http://www.abc.net.au/local/stories/2012/03/26/3463571.htm

=** SOURCE: **= ABC News

=** DATE EXTRACT WAS WRITTEN: **= 26th March 2012

=** DATE CURRENT EVENT WAS WRITTEN **= 26th March 2012

=** EXPLANATION OF THE ECONOMIC THEORY RELATED TO THE ARTICLE: **= The economic theory related to this article is supply and demand. Supply and demand is an economic model that shows price determination in a market that says that in a market, the unit price of a particular good will vary until it falls to a point where the quantity demanded of consumers and the quantity supplied by producers results in an equilibrium. There are 4 basic laws of supply and demand- if the demand increases and supply remains unchanged, then it leads to higher equilibrium price and higher quantity; if the demand decreases, then it leads to lower equilibrium price and lower quantity. The third is that if supply increases and demand remains unchanged then it leads to lower equilibrium price and higher quantity and the fourth is that if supply decreases and demand remains unchanged it will lead to higher price but lower quantity. In relation to the article, this is showing that there is a shortage of houses for people who are seeking affordable accommodation. A shortage is when there is not enough supply to meet the demand. This is different from a surplus where there is too much supply that meets demand. In this case, this means that there are too few houses for the demand for houses that people want, which causes a shortage. This article is saying that as more people are moving out of the city and into the suburbs and other areas where the demand for housing is much higher than the supply and homeowners could wait up till 18 to 24 months before being put into public housing accommodations.

=** VOCABULARY TERMS AND DEFINITIONS: **=
 * Shortage: Where the quantity available or supplied in a market falls short of the quantity demanded at a given time or price. This can occur if the government creates a price ceiling.
 * Surplus: Having more than the demand requires. This can occur if the government creates a price floor.
 * Supply: The willingness and ability of a producer to produce a quantity of a good or service at a certain price, in a given time period.
 * Demand: The willingness and ability of a consumer to purchase a quantity of a good or service at a certain price in a given time period.
 * Equilibrium: A situation in which the supply of an item is exactly equal to it’s demand. There is neither surplus nor shortage in the market.

=DIAGRAMS:=



From here we can see that there is a shortage because the quantity supplied is less than the quantity demanded. This would be a shortage because there is a line below equilibrium and the quantity supplied shows that there is less than what should be produced in order to reach demand. =EVALUATION:=

Despite the fact that there are more than 3,500 housing properties in the region, there is still a high demand and high shortage of affordable homes. The government has already tried to categorize this problem by categorizing people into those who are deemed in need for vulnerable housing situations, and those who are deemed less vulnerable for housing situations. However, even those who are deemed vulnerable may still have to wait up till 18-24 months before they are put through the system. There are more people moving out of the city and into other areas because of the more 'affordable' housing and more housing securities in other areas as opposed to expensive parts in the cities. The government has already implemented a few schemes to help the shortage of homes and find more homeowners to please.

In order to create a community where the homes people are able to find more homes faster, they could create a price floor where everything must be sold a certain price and cannot be sold below that price. This will affect the market because house producers would want to create more houses faster to sell them at a certain price that would not only not cause them to lose profit but it will also cause them to earn more which would cause more people to have houses as well. But the problem with this solution is that it may cause too many houses to be built which would eventually cause a surplus of houses in the market.

Another solution could be the government could creates subsidies and pay home producers a certain amount for a certain amount of homes they they have built and subsidize part of the building of homes. This way, it creates an incentives for the producers to make more homes because they create a profit and get subsidized by the government.

However a benefit of having not enough homes is that some homes that are privately owned could sell for more expensive prices than if there were an equilibrium number of homes. Because there are a shortage of homes, by the law of demand, the greater there an amount of items to be sold, the less the items must go for in order to find purchases. But since there are a shortage of the homes, there will be a higher demand for homes and therefore consumers will be willing to pay more for their homes. Personally, I think that despite this being a potential social issue because certain 'vulnerable' peoples may not be able to find affordable accommodation, this is a benefit to the producers because they can earn a profit for selling houses in certain areas to certain people who are looking for homes.