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New House Readiness

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  • April 2012
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New House Readiness
Dana Wills
XECO/212
March 30, 2012
Janet Hunter

New House Readiness
When anyone is considering on buying a home for the first time, this is most likely the biggest decision that they have made in their entire life, whether this decision involves two people or not. To help me through this important process I will use the 10 principles of economics. This will be a major role in my decision and they are listed below: 1. People face trade-offs- This means that you trade one thing for another. 2. The cost of something is what you give up to get it- things often cost more than the actual price. 3. Rational people think at the margin- small adjustments to an existing plan of action. 4. People respond to incentives- this entices someone to do something. 5. Trade can make everyone better off- allows each person to specialize in the activities they do best. 6. Markets are usually a good way to organize economic activity- markets are decided by decisions of millions of firms and households. 7. Governments can sometimes improve market outcomes- this enforces the rules and maintains the institutions that are keys to a market economy. 8. A country’s standard of living depends on its ability to produce goods and services- when workers produce a large quantity of goods and services; they enjoy a high standard of living. 9. Prices rise when the government prints too much money- this causes the value to fall so items cost more. 10. Society faces a short- run trade- off between inflation and unemployment- economic policies push inflation and unemployment in opposite directions. I now have to manage my time to prepare for the big move and the arrival of my baby. Any and all decisions from here on out will affect not only me but the well being of my little one. Money-wise I will need to calculate my wages as well as any debt that I may have, and see what I need to do to start cutting costs. This will mean I cannot go out shopping and put...

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