Question

Suppose the town of Lenmore is hit by a tornado that destroys 25% of its housing. Would you expect the total expenditure on housing in Lenmore to be greater than, the same as, or less than it was before the tornado hit? Explain your answer.

Answer 1

The total expenditure on housing in Lenmore is likely to increase after a tornado destroys 25% of its housing due to rebuilding costs, materials, and temporary housing for displaced residents.

Step-by-step explanation:

If the town of Lenmore is hit by a tornado that destroys 25% of its housing, we would expect the total expenditure on housing to likely be greater than it was before the tornado hit. This increase in expenditure would be due to the need for rebuilding and repairing the damaged housing stock. Construction costs, building materials, and labor are all factors that contribute to the overall expense. Moreover, short-term housing needs for displaced residents could lead to an increase in rentals or temporary housing solutions, which might also contribute to an increase in housing expenditure in the aftermath of the disaster.