Chapter 36 — Exercises

A1. Apply Baumol's cost disease to college tuition. Why does teaching get more expensive even though it hasn't become more "productive"? A2. "Is college worth it?" Compute the cost-benefit for a typical Millbrook State student (use the numbers from Chapter 1's case study 2). Now compute it for someone who drops out after 2 years. A3. Why is housing affordability primarily a supply problem? Apply supply and demand. A4. Minneapolis eliminated single-family-only zoning in 2018. What does the model predict for housing supply and prices? A5. A student graduates with $35,000 in debt at 5% interest on a 10-year plan. What is the monthly payment? A6. "Just build more housing" sounds simple. Why is it so hard politically? Apply NIMBYism and concentrated-vs-diffuse interests. A7. Compare the Millbrook housing crisis (Chapters 5, 7) to the national housing crisis. Are the same forces at work? A8. "Millennials just need to work harder." Apply the structural-forces framework.

Selected answers in appendices/answers-to-selected.md.