Information Economics with Real Estate Applications

Chapter 1 Basic microeconomics

In this chapter, the basic characteristics of markets and their main actors – consumers and producers – are introduced. In addition, the implications for society at large from a welfare perspective are highlighted. It is illustrated what motivates the actions of different stakeholders in the built environment such as apartment buyers or property developers.

Economics can in one sentence be described as finding the efficient use of scarce resources. Since the budget of consumers, the material available to firms and the land on which it is possible to build all are finite, we must find ways to optimally allocate those resources.

1.1 Introduction

After the 2008 financial crisis and in the light of low interest ...