A New House Decision



A New House Decision

Introduction

This paper intends to discuss the economic significance of deciding on the purchase decision of the house. I am currently renting studio apartment and have just discovered that I am pregnant. The problem within my apartment is that it is far away from schools and local services that is the reason I am planning to move. I realize that purchasing a new home requires a substantial financial outlay and making the wrong decision has long term financial consequences. This paper will indicate my decision about the purchase of the house while keeping in mind the principles of economics.

Discussion

The decision to buy a house is extremely important for everyone. The decision is important because it reinforces various aspects when the people are about to raise their children within that house. The economic side of making the purchase decision remains always important. The financial consequences can be immense if the wrong decision is taken for buying a house. This paper will examine the most important aspects of economics and also the effects of the economic situation on the decision. Reviewing economic and financial status for the purpose of deciding on the purchase decision of the house remains extremely important (Richard, 2010).

The existing situation of economy plays a significant role in making the purchase decision. Moreover, the comparison of marginal costs with marginal benefits is also important. The concept of Tradeoffs remains extremely important from the economic viewpoint of making the purchase decision. Tradeoff refers to the capability for preferring one thing over the other (Robert, & Marc, 2009). I believe I would have to sacrifice various monetary means for the purpose of buying the house. My tradeoff will be to let go my expenditures on maybe clothes and dining out for a certain amount of time period for arranging the money to buy the house.

Moreover, the principle of the 'costs' and 'benefits' is also important from the economic viewpoint of making a purchase decision related to a house. I believe that the concept of opportunity cost comes within this perspective. In order to purchase a house to fulfill the needs of my child, I will have to sacrifice many things. For instance, cutting down on my expenses on entertainment, food and clothing is the opportunity cost I will be giving for buying the house I intended to buy.

The next important aspect is the principle of marginal thinking. This concept of economics makes all of us capable of taking rational decisions. The marginal benefit of purchasing a house must outweigh the marginal costs. Basically, the benefit I intend to possess after buying a house is much more than the costs I am paying for it like cutting down on my entertainment and clothing. I believe that the marginal benefit of buying a house surpasses the marginal costs I am paying. Moreover, the aspect of incentives is important to consider while analyzing the market. Market basically refers to the options of buying the house I ...