Principles of Economics - Supply and Demand

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XECO212: Principles of Economics

Week Two Assignment

Supply and Demand Paper

Deborah Johnson

05/31/2012

Thomas Bell

Assignment: Supply and Demand Paper

For this assignment I was to chose a good that I have had experienced purchasing. Unfortunately this has been 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 homeownership. I chose this topic because 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, I see many factors that could possibly affect the supply and demand of this good. One such factor is the 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 required a person can fall into major debt. Another factor to consider is your financial situation. 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 there is a stable economy 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. Another factor to take into consideration would be borrowing a loan from the bank. When it comes to purchasing a home people look to the banks to borrow loans...
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