Xeco 212 Week 1
K 1Decision-Making: Buying a House
Decision-Making: Buying a House
Hewlett-Packard Company
Hewlett-Packard Company
Shannon Hickman-Harrison
Evaluating the 10 Principles and how they apply to buying a house.
Shannon Hickman-Harrison
Evaluating the 10 Principles and how they apply to buying a house.
Purchasing a home is likely the most monumental commitment one will be faced with. This deduction is based on the overall cost of purchasing a home, the average length of a mortgage, and preparation for home repairs. It is naïve to believe that portions of all the decision making principles would not at some point factor in with such a long term investment, any errors in the decision making process would create long term financial hardships. I tend to look at a purchase of this magnitude as a goal, where the decision is not whether you should or should not purchase, but a plan as to when is most opportune to make the purchase. When planning a goal you must evaluate current circumstances, plan for future circumstances and make smaller goals along a timeline used to build up to the ultimate goal at the desired time frame. With all of this in mind I would find principle three the most useful in this process. Rational people think at the margin, this allows for minor changes along my path while allowing me to weigh marginal cost and marginal benefit. Within this principle, I, as the decision maker would only progress toward the purchase if the marginal benefit exceeded the marginal cost. I would evaluate this rationally, doing the best I can to achieve my end objective. Trade can make everyone better off, explains that trade allows everyone to specialize at what they are specifically best out. People interact through trade and competition. So, in other words, as I am searching for the best house at the best cost other families are doing the same. It is important to understand that as I am deciphering
Decision-Making: Buying a House
Hewlett-Packard Company
Hewlett-Packard Company
Shannon Hickman-Harrison
Evaluating the 10 Principles and how they apply to buying a house.
Shannon Hickman-Harrison
Evaluating the 10 Principles and how they apply to buying a house.
Purchasing a home is likely the most monumental commitment one will be faced with. This deduction is based on the overall cost of purchasing a home, the average length of a mortgage, and preparation for home repairs. It is naïve to believe that portions of all the decision making principles would not at some point factor in with such a long term investment, any errors in the decision making process would create long term financial hardships. I tend to look at a purchase of this magnitude as a goal, where the decision is not whether you should or should not purchase, but a plan as to when is most opportune to make the purchase. When planning a goal you must evaluate current circumstances, plan for future circumstances and make smaller goals along a timeline used to build up to the ultimate goal at the desired time frame. With all of this in mind I would find principle three the most useful in this process. Rational people think at the margin, this allows for minor changes along my path while allowing me to weigh marginal cost and marginal benefit. Within this principle, I, as the decision maker would only progress toward the purchase if the marginal benefit exceeded the marginal cost. I would evaluate this rationally, doing the best I can to achieve my end objective. Trade can make everyone better off, explains that trade allows everyone to specialize at what they are specifically best out. People interact through trade and competition. So, in other words, as I am searching for the best house at the best cost other families are doing the same. It is important to understand that as I am deciphering
Cited: Mankiw, G. (n.d.). Principles of Economics. Cengage Learning.