Supply and Demand Simulation

Topics: Supply and demand, Microeconomics, Elasticity Pages: 4 (1129 words) Published: March 9, 2014


Supply and Demand Simulation

ECO/365
August 12, 2013

Supply and Demand Simulation
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.

Two microeconomics and two macroeconomics principles or concepts

Microeconomic theory considers economic reasoning from the viewpoint of individuals and firms and builds up to an analysis of the whole economy. Microeconomics is the study of individual choice, and how that choice is influenced by economic forces. Microeconomics studies such things as the pricing policies of firms, households’ decisions on what to buy, and how markets allocate resources among alternative ends. Our discussion of opportunity cost was based on microeconomic theory. In the simulation scenarios one and three are microeconomics principles because they deal with the part of economics that is about single factors and the effects of individual decisions. In both scenarios the levels of vacancy were individual decisions and prices were adjusted to meet the decision expectations.

The fourth and seventh scenarios are examples of macroeconomics. In the fourth scenario the population is going to increase due to a new corporation is moving into town and all their employees. This would affect all of Atlantis by increasing the population, lower the unemployment rate by creating new jobs, and growth in many other sectors will take place primarily in real estate since everyone will need places to live. In response to the growth Good Life’s apartment rates will increase from $1150 to $1400 due to the higher...

References: Fisher, D. (2013). The Bullet Bubble: Is Ammo The Next Bitcoin, Or Gold In The 1970s. Retrieved from http://www.forbes.com/sites/danielfisher/2013/04/09/the-bullet-bubble-is-ammo-the-next-bitcoin-or-gold-in-the-1970s/
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