In our first modules, we learnt some key economic concepts such as scarcity, supply and demand. To see how these concepts are applicable in the real world, I would like you to review the following articles related to the Singapore government's recent announcement to cap the number of permits required for owning a vehicle (known as Certificates of Entitlement or COE).
After reading, please complete the following:
1. Explain how the concept of the scarcity applies in this example;
2. Draw the supply and demand curves before and after the policy change; and
3. Explain what you think is likely to happen to the price of the COE after the policy change is implemented.