Week 2 Individual Assignment
February 25, 2013
Supply and Demand
The analysis will identify two microeconomics and two macroeconomics principles or concepts from the simulation, and explain why each principle or concept is in the category of macroeconomics or microeconomics. The analysis will identify at least one shift of the supply curve, and one shift of the demand curve from the simulation and what causes the shifts. The analysis will show for each shift, how it would affect the equilibrium price, quantity, and decision making. It will detail application to learned material about supply and demand from the simulation to workplace or real-world product. It will detail how concepts of microeconomics help understand the factors that affect shifts in supply and demand on the equilibrium price and quantity, and it will also detail how concepts of macroeconomics help understand the factors that affect shifts in supply and demand on the equilibrium price and quantity. The analysis will explain how the price elasticity of demand affects a consumer’s purchasing and the firm’s pricing strategy in relation to the simulation. The first microeconomic concept the simulation deals with is a monopoly. GoodLife is the only apartment complex in Atlantis at the beginning of the simulation. So the company has no other competition and can set the market price at whatever the company wants at that time. A monopoly is in the category of microeconomics because it is singular in structure, whereas it only produces one thing or group of like things.
The second microeconomic concept the simulation deals with is income. The simulation has the participant decide what actions to use to do two things: 1) increase income, and 2) lower vacancy rates. The participant is successful at a vacancy rate of 5% as this maximizes income. This is in the category of microeconomics because it deals with the income of one entity...