...Xeco 212 Checkpoint: a New House – Readiness Checkpoint: A New House – Readiness Leonard Sugue University of Phoenix XECO 212 Economic Theory Audra Sherwood February 17, 2011 A New House – Readiness Deciding to buy a house is a lifelong goal for many people. Imagine that you are renting a studio apartment and have just discovered you are having a baby. Your present apartment is small and far from schools and local services. You have decided to move. There are many factors that come into play when making such a large and weighty purchase. Examine the decision-making process from the perspective of an economist. In your Final Project, you use these principles and other factors to make a final decision whether to buy a house. Purchasing a home for the first time can be overwhelming. A house can be the largest investment someone makes. It can provide advantages, but it can present disadvantages as well. The following principles can be used when deciding to purchase your first home: People Face Trade-offs (Mankiw, 2007) The Cost of Something Is What You Give Up to Get It (Mankiw, 2007) When deciding to purchase a home, the principle “People Face Trade-offs” can be applied to help make a final decision. Making decisions requires trading off one goal against another (Mankiw, 2007). The buyer must sacrifice a little to gain a lot. First time home buyers must realize that it takes a lot of money to purchase a home. Buyers must sacrifice...
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...Latonya Rice Jan. 6, 2012 XECO/212 Week One Checkpoint; New House Readiness Deciding to buy a house, in my opinion, would be a lifelong goal that I consider an extremely serious investment. My studio apartment would not be large enough for the newest member arriving to my family; it would only suit the time being. Therefore, I have decided to move to larger accommodations. I have examined the factors that come into play with making such a large and weighty purchase from the perspective of an economist. The principles that I think would play a major role in my decision are: Principles 1 - 10. Principle 1: I would face tradeoffs in purchasing a home, a thorough look at my income and expenses will be a priority (i. e.”what if” scenarios). Principle 2: What can I give up to get my house (i.e. Sacrifices, what is necessary and what’s not). Principle 3: What are the benefits and opportunities of a house over an apartment? Principle 4: What are the incentives for me owning a house? Principle 5: Is this a beneficial trade that can make it better for everyone? Principle 6: Would it be a more beneficial organization owning a house (i. e. being closer to work, schools, etc.)? Principle 7: Would property rights enable more promotion for efficiency and to promote equity? Principle 8: Would this enable a higher standard of living or lower (with the trade- offs in my budget)? Principle 9: Inflation, the growth in the quantity of money (i.e. Would the payments...
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...CheckPoint: A New House – Readiness Principles of Economics XECO/212 Purchasing a first home is the biggest financial decision most people make in their lifetime. There are several factors to consider, and people who make this purchase must thoroughly review the risks and benefits. When my husband and I chose to buy our first home, we considered three economic principles: the decision-making principle of People Face Trade-Offs, the interaction principle of Trade Can Make Everyone Better Off, and the workings of the economy principle of Prices Rise When the Government Prints Too Much Money. We knew we would have to give up going out to eat or to the movies as often. Our mortgage payment is higher than our rent payment was, so we had to cut back on non-essentials; this was a trade-off we were willing to make The interaction and workings of the economy principles created a challenge. Home prices were inflated at that point, because of unethical loan. In this case, trade did make everyone better off, but only on paper. We knew we had to be careful of how we structured our mortgage so we were not in financial danger as the housing market fell. This required a lot of homework to make sure that we could meet these new obligations, and that we did not let our emotions make our decisions. The marginal benefit to us during the home search was that so many homes were available, and the marginal cost was the difference between our rent...
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