Supply and Demand Simulation
To identifywhich portions of the microeconomicsand macroeconomics principles are which in this simulationwe have to understand the difference between the two economical concepts first. Microeconomics is the study of the goods and services of the world and how they are affected by ways of the world. For example gas prices go up during the summer time for a reason other than oil companies wanting to make record high profits. The gas prices go up during the summer because we tend to travel more in the summer than we do during the winter. Families go on vacation more the weather is nicer nationwide, therefore the amount of outside events has increased drawing us out of the house and on the roads. Macroeconomics is the study of the economy as a whole. This concept takes into account the effect that unemployment is having on the housing market, how does the increase or decrease of taxes effect the spending habits of people, and the most recent favorite of us as Americans, how nationalized healthcare will increase or decrease the amount of small businesses in the near future. Now that we fully understand the differences between micro and macroeconomics it will make is easier for me to tell you which two concepts in the simulation were micro and which two were macro.
One of the first concepts that we learn about in the simulation is the concept of supply and demand and what effect it has on the rate of rental of the apartments. Learning that we have to get the apartments filled with people is the best way to increase revenue, but also knowing there is a fine line between what a person is willing to pay and how much revenue we need to generate to be a successful business. We also know that there is healthy sense of surplus that generates a demand. Which is also another concept of microeconomics; people want what other people have. This is one of the easiest forms of economics that we will learn throughout life. Christmas time shopping through the years has taught us this, companies every year launch new items around Thanksgiving in hopes to draw us into the stores to buy what we are afraid others will have and we won’t. For example the IPhone, few things have changed on this technology other than the operating system, it still dials a number and we can still surf the web with it. However there have been a total of 4 different IPhones over the last 3 years, and typically there are less available than there are demanded, which creates the price to be set at an unreasonable amount.
The macroeconomics of the simulation is just as easy to point out as the microeconomics, because these are directly related to the big picture of economics. The government setting a ceiling on the rent we could charge on our two bedroom apartments not only is an illegal way to govern but it is also macroeconomics at its finest. As well, we learned about an increase in the way the residents of Atlantis were transitioning into detached homes versus paying rent for a two bedroom apartment. In this case we had to find the equilibrium between the business making money and the supply and demand for our apartments as well as keeping the consideration for selling apartments as condos at the forefront of our minds.
Tyrone- The supply curve that I identified in this simulation is the upward sloping curve. I got an upward sloping curve as I increased the rate of the rent the number of apartments in supply increased. According to supply curve (2014) a supply curve is a graphic representation of the relationship between product price and quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. The demand curve that was identified in the simulation was a downward sloping curve which is more horizontal because of the price of the apartments went down and the demand skyrocketed.