Question

Choose an innovation in housing markets (online) and explain the potential for mass adoption in the US over the next 100 years. Why would a wealthy person choose to live in a small house, or install solar panels, when they have enough money to live in a mansion? Discuss the role of scarce resources on the choices we make.

Answer 1

Introduction:-

It is widely realized across the globe that the problem of housing is real, much so because of the fact that land in most countries is limited and that it has alternative uses as well.

Because of this fact, countries are trying their best in finding alternatives which can help them in managing every square inch of land in the best way this will make sure that the resources of the company can be utilized properly and benefits to each citizen be maximized respectively.

The world is fast moving and adopting modern technologies to ensure optimum utilization of scarce resources. Governments are trying their level best in improving the performance of land in terms of how it is utilized and taxing those who own vast lands to ensure common good can be achieved.

Case Specifics:-

Choose an innovation in housing markets (online) and explain the potential for mass adoption in the US over the next 100 years.

The housing market is frequented by many changes on a daily basis and the concept of a property managed by a company and providing all additional services is new and is rapidly spreading across the Asian markets, primarily because the population is relatively high in most urban areas.

Such services can and must in fact be adopted by the United States as well. The problem of the United States is that housing is extremely expensive and people spend a large amount of money on the upkeep of the same.

The 2008 crisis primarily could have been avoided if people did not stress on the need of buying a property but focused on the rented markets instead that would ensure lesser payments.

In case of the United States to avoid people paying high monthly payments to banks, the concept of living and sharing the same roof of a large property managed by companies is a new concept and can be adopted to ensure that while everyone gets a home, the prices of living remain stable in the economy.

Why would a wealthy person choose to live in a small house, or install solar panels, when they have enough money to live in a mansion? Discuss the role of scarce resources on the choices we make.

Many economists over the years have noted the fact that a house is not an asset but rather a liability. A house involves regular expenditure on maintenance, property taxes, water taxes and running expenses.

A smaller house on the other hand can offer the same kind of services at a minimum cost when compared to large scale living. That is the prime reason why people even when they have enough money to purchase a large home go in for options which are relatively smaller and earn relatively higher.

Therefore, since living in a smaller house allows easier living at a lesser cost which can be invested to earn money, rich people often prefer to live in small houses and increase their investments than spend on maitainence of a big house respectively.

Now coming to installation of solar panels, people realize that over a period of time, they might need to pay higher electricity bills as compared to installation of solar panels. The basic concept is install an asset which saves money over a period of time than spend on getting a service which will drain more money in the long run. People who deploy solar panels understand that their investment would lead to savings in the long run and therefore consider the investment as a saving on future expenses.

They realize that capital is a limited resource and exhausting it on services such as owning a large mansion or spending on electricity will deplete it and not allow it to grow.

Please feel free to ask your doubts in the comments section if any.