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ECN 340 (22)
Chapter 5

ECn340 Chapter 5.docx

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Department
Economics
Course
ECN 340
Professor
Thomas Barbiero
Semester
Winter

Description
ECn340 Chapter 5 The new home economics The marriage contract - From an economic perspective a marriage can be treated as a contract where if it were broken it can be enforced by the law - Both parties make a commitment to their own responsibilities, they recognize the rights and priveliges of the other and both agree to a certain set of rules and to the changes made - The reason people marry os to give the couple a chance to work out the rules and to create a contract that they will be both held accountable by it - No set ground rules can cause disagreement among people anad result in divorce - Because people have conflicting views of what a marriage should be, marriages never happen - Divorce can arise as a result of the lack of investment of enough resources due to a miscalculation of the resources needed or that they see the benefits from creating the contract is less than the cost - Rules are given meanining because of the moral obligation assigned from the agreement, and the pressure received from people who know of their obligations, and the result where the other party does not fulfill their obligations because we did not hold our own end of the bargain - The court is an important figure in the divorce process as it makes sure that both husband and wife receive some property rights in the family assets, both physical and intangible therefore making it an incentive to invest their time and resources in creation of assets and a strong ond - People in marriages may be exploited instead of taking a divorce as the cost of going through with the divorce, then they would not want to do it. The costs and benefits of marriage - While trying to make their satisfaction the most they can,they must be able to determine the costs and benefits of being married and compare those with those of being single, and taking into consideration the costs and benefits of being married, how much effort should be put towards finding a soul mate The costs of marriage - The considerations that must be taken before marriage include independence where in a married relationship people are not able to do as they please because peoples actions affect each other - Members of a family may make decisions through consulting everyone first thus agreeing to the costs of this in the future as decisionmaking will now involve more people - It is because of decision costs that both parties will agree to decisions made directorially - Each party may make their own decision but the benefis will outway the costs of making wrong choices - Separation of the ability to make a decision can make a family more efficient and if roles are not created at first, it will gradually appear. - Family is a factor taken into consideration for the production of goods and services enjoyed by the family members - Members of a family may not receive a good to an extent that would meet their preferences and tastes is a cost - Another cost is that members of the family may be “taxed” where they must pay for collective goods or projects that they do not agree with - Members having to make a decision, and sometimes accept decisions that they do not agree with a possible cost of being in a marriage - Costs of marriage include the
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