"The Chicago Fire of 1871 destroyed half the cubic contents of the city's buildings. The value of the surviving buildings after the fire probably exceeded the value of all the buildings before. True or False?"
Draw a supply and demand diagram for housing in Chicago and assume, for simplicity, a totally inelastic supply of housing both before and after the fire. Distinguish between the different concepts of value - value in use and value in exchange - and consumer surplus. What is the importance of the price of elasticity of demand?
How do I go about this question? I'm not really sure how to start and how to answer it.
Any help would be appreciated!