Unformatted text preview: involving costs and benefits when deciding to make large purchases or investments. Instability of the job market and lower average income levels are results of a weak or struggling economy. Consumers consider the amount of money and the overall cost and the benefits, if any, of deciding when to buy their home. If the conditions result in lower interest rates and lower home prices, some consumers may see these as benefits that are hard to pass up. These buyers are probably not significantly affected by the struggling economy and are taking advantage of the subprime conditions of the housing market. Marginal costs are lower and marginal benefits are higher in this situation and these factors attract buyers and investors. However, the average consumer does not have an excess of disposable income...
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- Spring '10
- Economics, marginal costs, housing market, struggling economy, marginal benefits