...XECO212: Principles of Economics Week Two Assignment Supply and Demand Paper Deborah Johnson 03/18/2012 Angela Rogers Assignment: Supply and Demand Paper For this assignment I am to chose a good that I have had experienced purchasing. This is a tough assignment has I have not had the pleasure of purchasing any of these goods. What I can do however is pick one of these goods and complete this assignment as best as I can. The topic I chose is other. I wanted to use purchasing a new home as this is something I have always dreamed of doing but having 12 children the possibility of owning my own home someday is slim to none. Now when I look at purchasing a new home a factor I see that could possibly affect supply and demand would be economy. I mean without the economy how will people be able to afford buying a home? Home purchases require a lot of money. Without the income a person can fall into major debt. There are many financial factors to consider such as the asking price, the monthly mortgage fees, closing costs, homeownership expenses, insurance, and additional income for routine maintenance costs or major repairs/replacements. When the economy is stable people tend to make more money and therefore the demand for houses increase. When the economy is unstable or low the demand for houses decrease. The reason this factor can affect supply and demand is because when the demand for homes increase the price for homes increase as well. This is due to having more buyers than...
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...Supply and Demand Katelyn Cranmer XECO/212 March 25, 2012 Supply and Demand Supply is the amount and type of real estate available for sale or rent at differing price levels in a given real estate market. Demand is the amount and type of real estate desired for purchase or rent in a given market at a given period of time. In the real estate market there are factors that affect the supply and demand. One of the factors that affect the supply is the availability of loans and financing to build new homes. When the market crashed the availability of loans and financing of a home became very scarce. Because of the availability of home loans and financing it has made the supply of new homes go down, with no loans or financing there is no money to be able to afford land to build on or to pay a skilled contractor. When there is no availability for new homes the demand seems to be higher. When the supply is affected in the housing market the prices seem to be lower there for there is a higher demand for house, because it has now become affordable to buy. However, one of the factors that can affect the demand is the price of a new home along with the consumer’s income. When consumers are looking into buying a house everything is based off the amount of income that they bring in. If the consumer’s income is to low then they will not be able to purchase their new house. Because the prices of a new home seems to be relatively more than people can afford with the current amount...
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...Course Date Economic analysis of the current residential housing market in Houston INTRODUCTION This paper provides an economic analysis of the current market for single family homes in Houston. Over the past few years, the real estate market has been declining in most states where prices of homes have been falling. In addition, the number of home buyers has been falling in most cities over the past few years, even after recovery of the economy from the 2008/2009 global financial crisis. However, in Houston, Texas, the real estate market has experienced a stable growth for the last 21 months (HAR 2013). According to a report by Houston Association of REALTORS®, home buyers in Houston increased by 15.5% in February 2013 as compared to the same month last year (HAR 2013). In Houston City, single family homes constitute about 76.5% of the total housing population. During the month of February 2013, 4,407 single family homes were sold in Houston. Single-family home average sales price increased by 9.6% to $220,445 from $201,113 in February last year. The median price also increased by 7.9% to $161,700 in February 2013 (HAR, 2103). Median price is the price at which half of the homes were sold. The above information is summarised in the table below. | February 2012 | February 2103 | Change | Single-family home sales | 3,815 | 4,407 | 15.5% | Single-family average sales price | $201,113 | $220,445 | 9.6% | Single-family median sales price | $149,900 | $161,700 | 7.9% | According...
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...Supply and Demand Simulation ECO/365 November 11, 2013 Supply and Demand Simulation Microeconomic and Macro Principles As per the simulation, the two major principles of microeconomics are demand and supply. The simulation focused majorly on the demand and supply of rental properties. The simulation clearly states that the macroeconomic factors are changes in the population trend. One of the factors that would directly influence these changes is choosing either to buy or rent apartments. Colander (2010), says, with falling prices it increases the quantity demanded and the supplied quantity reduces when the market prices recede (Colander, 2004). Supply and Demand Shifts From the simulation, the common factors of demand and supply are the availability of apartments, demand, potential renters and pricing. The simulation shows that the demand curve has a downward slope which make prices rise and decrease demand and vice versa. On the flip side of that is, supply has a downward slope curve and the number of apartments rises with price rises as well. In addition, larger numbers of apartments applies pressure on prices which leads to prices falling and for the complex to have a larger number of renters so they need to lower the price on apartments. The opposite would be, fewer number of apartments results in an climbing pressure on prices to obtain a larger market share and keep equilibrium which would enforce the firm to increase prices. Supply and Demand Shift Effects ...
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...Supply Demand Simulation Macro and Microeconomic Principles From the simulation, the two major microeconomic principles are supply and demand. The simulation majorly focuses on the supply and demand of rental properties in Atlantis. In addition, the influences on supply and demand form the major topic discussed in the simulation. The macroeconomic factors clearly stated in the simulation are changes in the population trend, choosing to rent or buy apartments and factors that directly influence these changes. Colander (2010), states that the quantity demanded always increases with falling prices and quantity supplied reduces with receding market prices (Colander, 2004). The company’s supply is almost 2,000 apartments; the company speculates at reducing the vacancy rates to 15 percent to increase demand, a clear applicability of the demand law. Demand and Supply Shifts The availability of rental apartments, demand for rentals, number of potential renters and the pricing are the common factors that affect supply and demand from the simulation. From the simulation, the demand curve slopes downwards; rising prices decrease demand and vice versa. On the other hand, the supply curve slopes downwards; the quantity of apartments increases with price increases in Atlantis. In addition, higher number of apartments exerts pressure on pricing leading to lowering of prices and for GoodLife to have higher number of renters, they must reduce apartment prices. On the contrary, lower number...
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...2016 Mr. Michael Kraynik Product Purchases and the Economy For this paper I’m going to select buying a home as my product of purchase since I’m currently in the market of selling my existing home and purchasing a new home. When considering making large financial purchases in today’s economic world, you have to take into consideration the possible long-term effects on your financial situation, current budget or future outcome. You have to ask yourself if the purchases you want are ideal and are you in a financial position to make such a significantly large purchase. There are so many factors to consider than just personal obligations or wants, but is it economically sound in today’s market as well. In this paper, I will talk about and try to explain some of the economic indicators such as interest rates and inflation rate as well as job market for the area. While considering if any of these indicators impact the supply for what I will demand over a two year period. Also in this paper, I have to answer how I might apply my understanding product, and how I am considering purchasing versus the supply and demand. Also I need to describe the impact on the price of the home and whether making the purchase should or should not occur or possibly be beneficial to me. Lastly, I will see if there are any macroeconomic shifts in supply or demand affecting the price of the Home. Thus, leading to the final decision of whether to purchase a new house or not. Economic Indicators With...
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...Michelle Corniciuc | A New House | Decision | 9/30/2012 | It is always a better idea to purchase your own home rather than pay for someone else’s with your rent payments. Owning an asset in the long run is better than a lease. There are many variables to consider before making your final decision. We as Americans find home ownership to be a valuable goal. Even this year’s national elections are using real estate as one of the most important issues. So, the decision to purchase a home is based on our country’s economy as well as your own. Of course the location of the real estate is a factor as well as the size of the lot and the condition of the building. What would you be willing to trade off or give up for the privilege of being the owner of your own home? What do you get in return for these tradeoffs? Now you must use the principles of economics to figure out some of the answers to your questions. You may have to use what you have available in savings to make a down payment and you may have to work more hours to afford your payments. In the long run you are placing all of those finances back into a type of savings for yourself and your family. These are only marginal changes that you will have to make. They are only small incremental adjustments that would be made to an original plan of action. Some people may find purchasing a new home a frightening experience. Spending your savings, moving into a new neighborhood, can be scary. You must take a look at your...
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...Supply and Demand August 12, 2013 Eco/365 Chris Foster Introduction There were two microeconomics and two macroeconomics concepts in the simulation. Atlantis is a microeconomics apartment company which manage apartment complexes and homes in the city. Atlantis had one shift supply curve and one shift in the demand curve when business started moving into the city. These shifts affected the equilibrium price, quantity, and decision making with the demand needed to supply to consumers. I am applying what I have learned with supply and demand from the simulation to my management job with our rate increases. The concepts of microeconomics helps us understand the factors that affect shifts in supply and demand on the equilibrium price and quantity. The price elasticity of demand affects consumers purchasing and the firms pricing strategy with supply and demand. Microeconomics and Macroeconomics There were two microeconomics and macroeconomics concepts in the simulation. Atlantis is a rental company that manages the apartment and homes in the low populated city. The microeconomics concept in this simulation with Atlantis is the rental decision to maximize profit with decreasing vacancies. The property management company has consider the supply and demand of the apartments either by lowering the prices to increase rental occupancy or by raising the prices to maximize the cost of the rental inflation in the apartment complex. The macroeconomics...
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...the economy Anthony Norman ECO372 January 25, 2016 Steven Karp Product Purchases and the economy Consumers, such as myself are using more caution when it comes to determining whether or not we should invest in purchasing a new home. There are numerous factors to consider before buying a new home that for example the price and location. I must partake in the necessary research to know what lies ahead for me when it pertains to budgeting and making monthly payments on a new mortgage. The wellbeing of the economy can be a game changer on whether or not I should make such a huge investment as purchasing a new home. Two important economic indicators, which will aid in helping me to determine if buying a new home will be a wise and sound investment, are the interest rates and housing start. Economic Indicators According to Investopedia (2015), an interest rate is the sum charged communicated at a rate of essential, by a loan specialist to a borrower for the utilization of benefits. Interest rates are often shown on a yearly premise, known as the annual rate (APR). The interest rate affects the affordability of buying a home. If the rate increases by 1%, it will have a significant impact on my monthly payment. For example, if I am looking to purchase a home that cost $400,000.00 at an interest rate of 3.0%, I am looking at a mortgage of $1,686.00. If that interest rate were to increase by 1%, my monthly payment would increase by $223.00 with a monthly note of $1,909.00. The...
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...the wrong time. Purchasing a home is one of the biggest financial decisions that any one person can make. The strength of the economy can give you good information as to when to buy and when not to buy. Timing can be very beneficial for a buyer and understanding how to make the decision when to buy can have long term financial consequences for the buyer. In this case the buyer is me. When making a decision to buy a new house I will look at the principles people face tradeoffs, the price of something is what you give up to get it, rational people think at the margin, and people respond to incentives. While I want to buy a new house there are several different areas that I will look at before making the purchase. How much each home costs plays a role in my decision. It is important for me to live within my means of money so making the right choice will benefit me the most. Looking at new homes there may be two that are different in space, number of bedrooms, and price. I personally am looking for the most amount of space for the price that I can afford. I currently own the house that I have now and in order for me to buy it will have to be beneficial for me to give up what I have at the moment. I face tradeoffs of buying a new house verses keeping the one that I own now. Getting more space over keeping the amount of space I have at the moment. Having three kids in a three bedroom house can get congested at times. I know that a four bedroom home will make it to...
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...Money: Demand and Supply The Meaning of Money Money is the set of assets in an economy that people regularly use to buy goods and services from other people. Money Supply The money supply is a policy variable that is controlled by the Fed. * Through instruments such as open-market operations, the Fed directly controls the quantity of money supplied. Money Demand Money demand has several determinants, including interest rates and the average level of prices in the economy. People hold money because it is the medium of exchange. * The amount of money people choose to hold depends on the prices of goods and services. In the long run, the overall level of prices adjusts to the level at which the demand for money equals the supply. Figure 1 Money Supply, Money Demand, and the Equilibrium Price Level Figure 2 The Effects of Monetary Injection Chapter 31 Open-Economy Macroeconomics: Basic Concepts Open and Closed Economies * A closed economy is one that does not interact with other economies in the world. * There are no exports, no imports, and no capital flows. * An open economy is one that interacts freely with other economies around the world. An Open Economy * An open economy interacts with other countries in two ways. * It buys and sells goods and services in world product markets. * It buys and sells capital assets in world financial markets. THE INTERNATIONAL FLOW OF...
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...Supply and Demand Simulation XXXXX XXXXXXX ECO/365 November 12, 2012 XXXX XXXXXX Supply and Demand Simulation The scenario of Atlantis, the perfect city in somewhere, United States, provides an excellent opportunity for students to learn how to apply supply and demand concepts for two-bedroom rental apartments. Atlantis is a city that anyone would love to live in with its ideal everything, but even with two very experienced managers from Goodlife Management, there were a few challenges to overcome as situations and factors changed, affecting supply, demand, and equilibrium. Decisions were made with the ever-changing requirements to look at demand and supply curves while considering how they shift, and the impact of a price ceiling on quantity demand and quantity supplied for these two-bedroom rented apartments. The scenario also provides the opportunity to consider how it may apply to a real-world product or situation in the workplace and how price elasticity of demand affects a consumer’s purchasing and a firm’s pricing strategy. During this scenario there were instances in which the price was reduced to meet a 15% vacancy rate and the other where the price was increased to rent out all the apartment units. In both instances, regardless if the price were changed downwards or upwards, the quantity demanded and supplied changed for a movement along the curve. There was also some non-price change factors that caused shifts of the curves, the announcement of...
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...Supply and Demand Name University of Phoenix Supply and Demand People who are planning to buy a new house should first be well informed about the status of their new locality’s real estate market. The housing market is strongly governed by certain economic conditions, and understanding the economic trend will allow interested buyers to wisely choose the best price for their new house. It is also an established fact that the business conditions can also influence the real estate market; however, the huge aspect that will truly affect housing prices is still the law of supply and demand. The principle of supply and demand is an economic principle that is applicable to all commodities whether material or immaterial. It is a principle that establishes the relationship between the price of the product to its availability and supply. So for example, if there is a high demand for a product that currently has low supply, the tendency is for the prices to be higher since there is the security of the market that can support the price imposed. On the other hand, if the demand for a certain product is low, but the supply is high, then its price will naturally decrease simply because of its high availability in the market (Mankiw, 2004). The homebuilding industry originally started out of the human needs to have stable and hardened shelters that can provide them with long term protection and comfort, especially when they are already starting to...
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...of Supply and Demand Megan O’Brien ECO/365 1/19/2015 RIna Bills The simulation on supply and demand relates to the Goodlife Management Company which leases apartments to renters. As the property manager, I was asked to set rental prices in a variety of situations in order to meet the demands of the population in the area while attempting to maximize profits for my company. Microeconomic principles such as the law of demand, the law of supply, equilibrium, and price ceilings were all factors in determining price. Macroeconomic principles such as the consumer price index and fiscal policies which can institute price ceilings also related to this activity. Goodlife was considered a monopoly in the market in the area of Atlantis because it was the only rental company. In the first simulation, I was asked to lower the rental rate to increase quantity demanded and lower the vacancy rate. I was successful in increasing demand but was unsuccessful in maximizing revenue. However I was successful in determining the equilibrium rental rate and equilibrium quantity. This can be done by finding the point at which the supply curve and demand curve intersect and there is no shortage or surplus. A new company, Lintech, then moved to the area increasing the population and increasing the demand for apartments. Supply decreased and left a shortage of apartments. Was correct in identifying the increase in rental rate and demand by was incorrect in identifying the impact on supply. Employees...
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...Supply and Demand Paper A good that I have experienced purchasing, which has factors of supply and demand is a new house. One factor that can determine the supply and demand ratio, which can lead to an increase or decrease of price is the area that the house is purchased in. I live near a large college, Virginia Tech, which employs and educates thousands of individuals. The factor of this situation is the closer to the college an individual chooses to live, the more expensive products will cost to live there. If Virginia Tech's athletic program made a turn for the worse, then that could downsize the amount of people in this area, which would decrease the need of housing in the area. Second is the economy, with the ups and downs of the economy, individuals are afraid of making drastic change involving money because of the scare of losing his or her job. Basically with this situation, someone that has a good job and good credit can determine certain outcomes by buying a house at a better price because others are scared to. A motivated seller will not hesitate to sale a house to an individual that offers a fair price for a house that has set on the market for a time period. This type of situation generally drops the demand factor, which decreases the value of the product. There are a couple substitutes that can establish a comfortable market value for a house around the area I live. If an individual wants to live in this area but cannot afford the housing...
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