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 houses available. This increase however, will make it much easier for people to sell these homes which will then increase the supply of houses on the market.
Once the supply for homes increase, the cost for the building materials will begin to rise as well which in turn will raise the costs of the housing market which will cause the demand for homes to go down again, making companies