Preview

ECO 365 Wek 2 Individual Assignment

Good Essays
Open Document
Open Document
824 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
ECO 365 Wek 2 Individual Assignment
Microeconomics and the Laws of Supply and Demand
ECO/365
Microeconomics and the Laws of Supply and Demand
The economy is divided into two categories microeconomics and macroeconomics. Microeconomics refers to the study of individual’s behavior within the economy. It concentrates on factors that influence the individual’s economic choices based on economic forces. The study of individual’s behavior when it comes to supply and demand is an important element to microeconomics. The law of demand says that the quantity demanded increases as the price falls or decreases as the price rises. An individual can have many wants, but it is restricted by their ability to pay for the goods. The law of supply says that as the quantity of supply rises as the price rises and falls as the price falls. Macroeconomics studies the economy as a whole. It mainly deals with issues with inflation, unemployment, business cycles and growth.
Microeconomic Concepts
The simulation had many examples of microeconomics princicples. A substitute is an example of microeconomics found in the simulation. GoodLife Management has a monopoly on apartment complexes because they own all 7 apartment complexes in Atlantis. A substitute in this case is a good that can replace the apartment rental. The closest substitute is provided by Oakridge Builders that sell detached homes. The supply curve is another microeconomic concept. Supply refers to the amount of goods or services available. In the simulation the supply decreased as people moved into the area, rental prices decreased, and population increased. The supply increased as more individuals decided to purchase instead of rent, and rental prices increased.
Macroeconomic concepts
The simulation also contained macroeconomic principles. The first concept of macroeconomy that was identified in the simulation was monopoly. Monopoly refers to a company’s controls of all the supply of a good or product in a specific area. GoodLife Management is the



References: Colander, D. C. (2013). Microeconomics (9th ed.). Retrieved from The University of Phoenix eBook Collection database.

You May Also Find These Documents Helpful

  • Better Essays

    ECO 365 WK 2

    • 874 Words
    • 3 Pages

    Identify two microeconomics and two macroeconomics principles or concepts from the simulation. Explain why you have categorized these principles or concepts as macroeconomic or microeconomic.…

    • 874 Words
    • 3 Pages
    Better Essays
  • Better Essays

    The results of this simulation are based upon the difference in the supply and demand chain within the management company. The simulation also entails how the management company copes with the change in the rental market as well as the economy. Changes in the business environment, such as layoffs, income, rental preferences, etc. cause changes in the supply and demand field because that is how they make their profits. If more renters are choosing Good Life Property to live in, then the demand goes up and therefore the supply for more units are on the rise. This also allows for the management company to charge market rate rent instead of offering specials. Since the demand would be so high, the management company realizes that renters are willing to pay market rent versus paying a special rent price which could ultimately cost the management company some profits. For example, Hal Morgan countered Susan Hearst decision on renting out each of the units that were available because of the cost of maintenance that will go up. Therefore the profit from renting out all of the units would not be good for the supply and demand idea because all of the profits would go on repairs etc. Hal Morgan also understood how higher prices could possibly keep renters away so he lowered the rental rate and rented out 600 less units to maximize…

    • 916 Words
    • 4 Pages
    Better Essays
  • Good Essays

    References: Colander, D.C. (2010). Macroeconomics (8th ed.). Retrieved from The University of Phoenix eBook Collection Database.…

    • 991 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Two microeconomic concepts that are present in the simulation are: supply and demand. The simulation talks about supply and demand or rental apartments from Atlantis. On the other hand, at macroeconomic level, we can talk about the changes in population trends when it comes to choosing to rent or not to rent apartments as well as factors that influence these changes. According to Colander (2010), the law of the demand says that quantity demanded increases as price falls, other things constant. On the other hand, the law of supply asserts that the quantity supplied decreases as price falls, other things constant. The supply of two-bedroom apartments of the company has reached 2,000. It is required to decrease the monthly vacancy rate from 28% to at least 15% to increase the revenue of the company. That is why the rental rate needs to be decreased,…

    • 851 Words
    • 4 Pages
    Better Essays
  • Good Essays

    The two principles that I found that related to the simulation for microeconomics were supply and demand, and scarcity. These two principles both have a direct effect on what a people will do, on a personal level, when it comes to their economic decisions. The simulation showed what would happen if more positions became available and people came to fill those positions. This caused a scarcity of living spaces which in turn caused a shift in the supply and demand curve. When looking at two principles that are related to the simulation for macroeconomics, I found that the use of government restrictions on rental prices and economic growth had the most effect. These two items had a greater external influence on population growth than what…

    • 1014 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Throughout the simulation there were a few concepts that dealt with macroeconomics as well as microeconomics. As learned from a previous course, macroeconomics examines nation-level economic facts like GDP, unemployment, foreign trade, and so on. Colander (2010) defines it as the study of the economy as a whole. It considers the problems of inflation, unemployment, business cycles, and growth (p.15). However, microeconomics deals with individuals, families, and companies. Colander defines it has the study of how individual choice is influenced by economic forces (Colander, p.15). One concept in the simulation that dealt with macroeconomics was when there was a price ceiling enforced. As explained by Colander, a price ceiling is a governmental-imposed limit on high a price can be charged, which is usually below the equilibrium price. This is a macroeconomic concept since it was enforced through the government. Another macroeconomic principle presented in the simulation was when there was an increase to the population of Atlantis, since it deals with growth and various economic situations will arise as a result. In…

    • 972 Words
    • 4 Pages
    Good Essays
  • Better Essays

    In the simulation a neighborhood called Atlantis is used. Atlantis is a nice neighborhood with many amenities that consumers demand (University of Phoenix, 2012). A two bedroom apartment rental in Atlantis is used in the simulation to present the effects of supply and demand. The simulation presents several scenarios that have been acquired by the management company of the two bedroom apartment rentals. The scenarios will show how price can affect supply and demand while being competitive within the market. In the simulation, microeconomics concepts are used. Microeconomics is the study of behavior on a smaller scale such as households and businesses (Colander, 2010). This is the opposite of macroeconomics. In the simulation the first scenario represents microeconomics. This is because the property management company has to make a decision on the rental rate required for the two bedroom available rentals to decrease vacancy and to maximize revenue (University of Phoenix, 2012). This is related to the principle of microeconomics because its focus is on supply and demand. To decrease supply of vacancies the company has to increase demand by lowering rental rates. Macroeconomics is presented in the simulation in the second scenario. Macroeconomics is the study of the behavior of the economy as a whole (Colander, 2010). The second scenario shows that the…

    • 1097 Words
    • 5 Pages
    Better Essays
  • Good Essays

    In the simulation two microeconomics principles are to study the decisions that one as a manager makes, including the business that regarded the allocation of the resources and the prices of apartment homes in this case. In the simulation there is a specific company that had to maximize the production and the capacity so that the apartment homes would lower in prices and compete with other apartment homes. With microeconomics the study of the individuals and the business decisions in the simulation are studied. In the simulation macroeconomics is used as well, the behavior of the economy as a whole. The industries and economies, the changes that occur depending on the decrease increase on the unemployment rate. Although macroeconomics and microeconomics are two different studies in the simulation, they complemented one another. In the simulation microeconomics took the opposite approach from macroeconomics that is the top-down approach vise the bottoms-up approach. Understanding that both are working together is very important at a workplace. Different situations come up and know the differences, and the things between microeconomics and…

    • 819 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    During this simulation, many scenarios covered an understanding of demand and supply, equilibrium, shifts in demand and supply, and price ceiling that a monopoly had to face when different situations arose. I was able to understand the concept of microeconomics and macroeconomics with the scenarios the simulation provided. During the simulation with regards to microeconomics, GoodLife is what is considered as an individual choice and how that choice is influenced by economic forces. In one case, the choice was to lower the rental rate for two-bedroom apartments on temporary, month-to-month lease in order to increase revenue. GoodLife also determined a new monthly rate to ensure that more two-bedroom apartments were occupied and revenue was maximized, since according to the Atlantis Housing Survey, it provided statistics on the demand for more. As far as macroeconomics, GoodLife’s demand for rented two-bedroom apartments were reduced tremendously, and decided to convert some of its apartments into condominiums for sale. The reason behind the decision was an increase in incomes after the entry of Lintech led people to prefer detached homes rather than renting. A shift of demand occurred due to the change of preferences causing demand to decrease, therefore the demand curve shifted to the left. Goodlife’s decision for making more condominiums caused a decrease in supply, therefore the supply curve shifted to the left. The population grew in Atlantis and many people wanted to live in the city, however the prices were too high which then made the government, City Counsel, to impose a ceiling of $1500 on monthly rental rates for two-bedroom apartments. This made it possible for the middle-income families who wanted to work in the city could find affordable housing. The effect of the price ceiling in this scenario was the consumer’s quantity demanded exceeded producer’s quantity…

    • 751 Words
    • 4 Pages
    Satisfactory Essays
  • Better Essays

    In this paper I will discuss and identify two microeconomics and two macroeconomics principles or concepts from the simulation. I will explain why I have categorized these principles or concepts as macroeconomic or microeconomic. I will also identify at least one shift of the supply curve and one shift of the demand curve in the simulation, and what causes the shifts. I will discuss how each shift, and analyze how it would affect the equilibrium price, quantity, and decision making.…

    • 1128 Words
    • 5 Pages
    Better Essays
  • Good Essays

    When I looked at the simulation for examples of macroeconomics I found it when the government stepped in to put a cap on the rent amount. In the simulation there was a survey that showed individuals were living outside of Atlantis rather than renting a place in the city limits where they work. As many of us do currently in our own lives we usually can’t afford to live in the city or area where the best jobs are. I am a prime example, I commute 50 miles one way to work as it’s where the best salary is. I live in an area where housing and rents are affordable and the overall cost of living is cheaper too. In the simulation, the government put a cap of $1550 for the monthly rent of a two bedroom apartment. This was meant to allow middle class families and individuals the opportunity to live where they work. Because of the rent cap, Goodlife didn’t rent out every apartment available as profits would not be able to keep up with the maintenance cost of having every unit rented.…

    • 936 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Macroeconomics Gdp

    • 5504 Words
    • 23 Pages

    Macroeconomics (from Greek prefix "makros-" meaning "large" + "economics") is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets. This includes national, regional, and global economies.[1][2] With microeconomics, macroeconomics is one of the two most general fields in economics.…

    • 5504 Words
    • 23 Pages
    Powerful Essays
  • Powerful Essays

    • Macroeconomics – is concerned with the economy as a whole. An overall view of the economy and aggregate economic behavior is studied. Emphasis on topic such as total production, income and expenditure, economic growth, aggregate unemployment, inflation etc is studied.…

    • 4895 Words
    • 20 Pages
    Powerful Essays
  • Satisfactory Essays

    Article Example

    • 316 Words
    • 2 Pages

    Economics is important and used in all facets of life. There are many issues across the world that are based on economic aspects, especially when making decisions that involve profit sharing, income allocation, minimizing unemployment, and price gauging. Some businesses will use economics to drive prices and determining on purchases or investments. Microeconomics is “The study of individual choice, and how that choice is influenced by economic forces” or also known as the invisible hand theory. Decisions that are based on microeconomics are typically motivated by costs; those costs can be of financial costs which include average fixed or total variable.…

    • 316 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Macroeconomics Lecture 1

    • 2229 Words
    • 8 Pages

    By contrast, microeconomics deals with the economic decisions of individuals (a typical consumer, a single firm, etc.) and how they interact with one another in the market. For example: the decision by a firm to buy or not a particular machine used in its production process is a microeconomic problem. The effect of a decrease in the interest rate on the saving decisions of Kenyan households is a macroeconomic problem.…

    • 2229 Words
    • 8 Pages
    Powerful Essays