New_House_Readiness

When deciding to buy a house in my current state and condition the principle that would play a major role in my decision making process would have to be Principle Two: The cost of something is what you give up to get it. The reason I choose this is because of opportunity cost, whatever must be given up to obtain some item. Within principle one, to get one thing we like we usually have to give up another thing we like. Efficiency and equity play a major role within this principle and once understood people are more likely to make good decisions if they understand the options that they have available. Principle three Rational people systematically and purposefully do the best they can to achieve their objectives, given the opportunities they have. Principle four is all about incentives, something that induces a person to act. Principle five is about trade. Trade between two countries can make each country a lot better off. Principle six is about marketing. Within this principle is the market economy which allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services. Principle seven is about the role of the government. They allocate property rights, the ability of an individual to own and exercise control over scarce resources. Principle eight is the standard of living based on goods and services. The amount of goods and services produced from each hour of a workers time. In nations where workers can produce a large quantity of goods and services per unit of time, most people enjoy a high standard of living and vice versa. Principle nine is all about inflation, the more money produced the less value it has and vice versa. Principle ten, is about the tradeoff between unemployment and inflation. Increasing the amount of money in the economy stimulates the overall level of spending and thus the demand for goods and services. Higher demand may over time cause firms to raise their prices, but in the meantime, it also encourages them to increase the quantity of goods and services they produce and to hire more workers to produce those goods and services. More hiring means lower unemployment. So in the deciding factor to buy a house there are many adjustments that go into play. One has to critically think about the situation and determine the marginal benefits and cost of acquiring this said new house.