Suppose that a group of humans build an enormous space ship of fixed size and travel into outer space, never to return. They live on board the ship and allocate all goods on the ship using markets. As the population grows, the price of housing on board the ship will
A) remain constant.
B) fall rapidly.
C) grow more slowly than the quantity of housing supplied.
D) grow faster than the quantity of housing supplied.

Question

Quizplus · Accepted Answer

As the population grows on a ship of fixed size, the demand for housing will increase while the supply remains constant, leading to an increase in housing prices.

Suppose That a Group of Humans Build an Enormous Space