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    PART A - Vodcast Media

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    Anthony
    Standard consumer theory says that when buying a house, consumers will make choices that maximize their utility given their budget constraints. They take into account factors like income level, prices of houses and other goods, and available housing options. However, behavioral economics suggests emotions also influence housing decisions. People may buy houses for emotional reasons like growing families rather than just maximizing well-being. Uncertainty and risk are not fully accounted for in standard models either.

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    PART A - Vodcast Media

    Uploaded by

    Anthony
    9 views3 pages
    Standard consumer theory says that when buying a house, consumers will make choices that maximize their utility given their budget constraints. They take into account factors like income level, prices of houses and other goods, and available housing options. However, behavioral economics suggests emotions also influence housing decisions. People may buy houses for emotional reasons like growing families rather than just maximizing well-being. Uncertainty and risk are not fully accounted for in standard models either.

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    jasen

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    PART a- Vodcast Media

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    Standard consumer theory says that when buying a house, consumers will make choices that maximize their utility given their budget constraints. They take into account factors like income level, prices of houses and other goods, and available housing options. However, behavioral economics suggests emotions also influence housing decisions. People may buy houses for emotional reasons like growing families rather than just maximizing well-being. Uncertainty and risk are not fully accounted for in standard models either.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    9 views3 pages

    PART A - Vodcast Media

    Uploaded by

    Anthony
    Standard consumer theory says that when buying a house, consumers will make choices that maximize their utility given their budget constraints. They take into account factors like income level, prices of houses and other goods, and available housing options. However, behavioral economics suggests emotions also influence housing decisions. People may buy houses for emotional reasons like growing families rather than just maximizing well-being. Uncertainty and risk are not fully accounted for in standard models either.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    PART A

    Using standard consumer theory, how consumer, investors, homeowners or future


    husband is going to buy a house.
    Consider budget (budget constraint)
    All other goods housing



    Housing costs

    What standard consumer theory says about point A?
    When consumer decides to make a choice it accounts for its budget, full
    knowledge and it has the ability, it has full level of certainty, considering all these
    for the factors that describe this individual (and its an individual who is going to
    buy a house)

    Can consumers maximize their level of utility?
    Whats a process? Income, budget to consider
    Limitation: - level of income, Different types of houses available (all other goods
    & aspects)
    Factors involve in residential dwelling, flat or apartment:
    Height of their house
    Location
    Size available in apartment

    When levels of income increase, you will buy more houses:
    Diagram
    Big house are greedy

    Income values: low income and high income
    When price of housing goes up it has effect on the budget, decision making
    process, and different kinds of aspects
    Assumptions: no more goods - key term

    Process of decision to buy:..
    Process of decision when selling
    Standard Consumer theory its a unify created theory which try to explain a
    rational agent. (keyword is agent- individual, human being)
    What influence is there on other people: mum dads family friends , what about
    market economy)

    Discuss in some details what behavioral economic suggest
    Emotions, into the thought
    You going to exchange a house thoroughly at any value: grow up children, for
    good times, parties and so on
    A damn effect on reference point (important)
    Bubbles: if it was not realized to make the role of uncertainty, that certainly
    coming to play.
    Level of risk involved in making decision, buying a house.

    Maximise well being
    Decision does maximize their well-being: they satisfy, do the best they can.
    Limitations when make that purchase
    Own purchasing process involving:- ask mum and dad, friends a price to
    housing markets
    How emotions affect the decisions to buy a house?
    - Emotions of fear

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