For the Writing Assignment, you need to read the article: “The Great Housing Rebound of 2012: How the Fed
Helped Sellers Beat the Odds” published on December 27, 2012 by the Times Magazine. The article is posted on
Titanium and can be downloaded from the following link:
The article illustrates a number of economic concepts we have discussed in class. You should write a short
narrative essay that analyzes the article using the tools developed in class. Below is a guideline on how the essay
should be structured:
Format
1. The essay should NOT exceed 3-double spaced pages, including graphs. Shorter essays are welcomed.
2. Use 12 point font, and 1-inch margins.
3. A SEPARATE cover page (in addition to the 3-pages) should be provided. The cover page should have your
name, semester, and class section. DO NOT include your name on the remaining pages.
4. You DO NOT need a “reference” page unless you use resources outside this article. This is not a research
essay so the above article should be your primary source, but you may choose to reference your text, lecture
notes, or other articles. If so, you need to cite the references at the end of your essay.
5. STAPLE your essay. DO NOT bind the pages or place them in folders, etc.
6. I deduct points if these rules are not followed. Details are important!!
Content
Your essay SHOULD address ALL points/questions below and include 3 graphs
1. In the first paragraph introduce your essay, say what you are going to discuss, and reference the Times
article.
2. In the following separate paragraph(s) summarize the main points of the article.
3. In one passage the article reads: “Rising home prices allow lenders to be more generous with home
financing, which allows even more prospective home buyers to access the market, further driving up home
prices.” Discuss this passage by addressing the following points and provide an analysis (in an essay form):
a. Using an S-D graph (on a market for housing), show how “lenders being more generous with home
financing” impact the housing market. Does any of the curves (Demand or Supply for homes) shift
“when lenders are more generous” and why?
b. What happens to equilibrium price and quantity of homes when “lenders are more generous with
home financing”?
c. What happens to consumer and producer surplus in the housing market when “lenders are more
generous with home financing”?
4. In another passage the article reads: “Record low mortgage rates, primarily (though not exclusively) due to
the Fed’s decision to buy up mortgage-backed securities, have done much to boost home prices.” Discuss
this passage by addressing the following points and provide an analysis (in an essay form):
a. Using an S-D graph (on a market for housing), show how “the Fed’s decision to buy up mortgagebacked
securities” has impacted the housing market. Does any of the curves (Demand or Supply for
homes) shift (because of the Fed policy) and why?
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b. What happens to equilibrium price and quantity of homes due to the ” the Fed’s decision to buy up
mortgage-backed securities”?
c. What happens to consumer and producer surplus in the housing market because of “the Fed’s
decision to buy up mortgage-backed securities”?
5. In another passage the article reads: “there is reason to be concerned that distressed home sales — like
foreclosures or short sales — will hamper the housing recovery in 2013.” Discuss this passage by
addressing the following points and provide an analysis (in an essay form):
a. Using an S-D graph (on a market for housing), show how an increase in “foreclosures” impacts the
housing market. Does any of the curves (Demand or Supply for homes) shift and why?
b. What happens to equilibrium price and quantity of homes because of an increase in “foreclosures”?
c. What happens to consumer and producer surplus in the housing market when “foreclosures” rise?
6. Based on your understanding of elasticity, which of the market do you think has a higher elasticity of
demand: buying a house/apartment or renting a house/apartment? Provide a brief explanation on your essay.
7. Write your conclusions in one last paragraph.
Grading and Other Considerations
1. Your paper will be graded based on the following criteria:
a. The quality of your writing (separate from the quality of your analysis).
b. Grammar, spelling, sentence structure.
c. The quality and depth of your analysis,
d. Your demonstrated ability to relate and apply the materials discussed in class to the news story
2. The DEADLINE to submit the paper is December 11. If you would like to get feedback and a chance to
revise your paper, you may turn in a first draft on November 20th at the latest, allowing time for
review/revisions.
3. The paper is graded out of 100 points and is worth 15% of your grade
4. NO LATE PAPERS WILL BE ACCEPTED.
5. The quality of the paper matters, not quantity. Please make sure that your sentences are complete, coherent
and grammatically correct.
6. You need to hand me A HARD COPY of the paper. Electronic submissions are NOT ACCEPTED.
7. Make sure that you do YOUR OWN WORK and use YOUR OWN words when developing the essay. You
should by no means copy somebody else’s paper – either your classmate’s paper, or the papers that you use
as a source of information. Copying violates the university honor system, and will be punished accordingly
