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
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.