Part 1: (choose one question to answer, do not answer both) 1) Refer to the reading (Bardhan and Walker, "California Shrugged")

Part 1: (choose one question to answer, do not answer both)

1) Refer to the reading (Bardhan and Walker, "California Shrugged"). Rising inequality in the 2000s was caused both by higher income growth for the rich and slow to negative growth for the poor. Describe how each of these trends contributed to the housing crisis. Explain in 4-5 sentences.

2) Refer to the reading (Bardhan and Walker, "California Shrugged"). How did subprime mortgages cause the housing crisis? How common were they in Southern California?

------------------------------------------------------------------------------------------------------------------------------------------

Part 2: (choose one question to answer, do not answer both)

1. Refer to the Carlina reading. Suppose there are two cities, City A and City B. City B enacts a series of zoning restrictions that limit how much new housing can be built. Assuming no change in City A's regulatory environment, discuss the relative impacts that these policies will have on City B's 1) housing supply elasticity and 2) migration into the city. Explain in 4-5 sentences.

2. Refer to the Carlina reading. Assuming no housing restrictions (i.e., an environment where developers are free to build new housing), what will be the primary effect of an increase in housing demand in a city on 1) new housing developments, 2) employment and population growth, and 3) wages? Explain in 4-5 sentences.

------------------------------------------------------------------------------------------------------------------------------------------

Part 3: (choose one question to answer, do not answer both)

1. Refer to the San Bernardino Sun editorial from this week's assigned reading. What is the definition of "overcrowding" and how does it link to lower educational attainment? Explain in 4-5 sentences.

2. Refer to the Next10 article on migration in California. Is net out-migration from California concentrated across all income/education levels? Explain in 4-5 sentences.