Economic Simulation
Economic Simulation
Isaac Newton’s third law of motion states, “That for every action there is an equal and opposite reaction. This is also true for economics. The action and reaction of supply and demand is best if allowed to be naturally forming. This enables Microeconomics and Macroeconomics to balance and stay stable. This essay will discuss the effect of supply and demand based off the data from the economic computer simulation from class.
Microeconomics
The simulation implemented different Microeconomics and Macroeconomics concepts and principles in the teaching process to show the little picture and big picture of economics. Below are the concepts of Microeconomics that I focused on during my learning.
The simulation included behavioral economics in its teaching. Behavioral economics uses a broader set of building blocks than traditional economics which uses rationality and self-interest. Behavioral economics helps explain why consumers in Atlantis preferred detached homes instead of two bedroom apartments at the fifth year in the simulation. In the simulation Consumers show that a rational decision is the norm for majority of the population but is not the sole factor that Atlantis’s housing market is based off.
The simulation gave a scenario of a big company establishing its operations within Atlantis. This move into the city predicted an increase to the population. The property management consultant suggested increasing the rental rates in response to the increase of demand. It is a Microeconomic factor because it reflects changes on a small scale which impacts the economics of the larger scale. This is the small to large approach.
Macroeconomics
Macro externalities are relevant in the simulation. One of the scenarios was that the city council voted to implement a price ceiling of $1550 on the two bedroom apartments. This was done so families could afford to work and live in the city. The cause and effect of this decision created less supply
Isaac Newton’s third law of motion states, “That for every action there is an equal and opposite reaction. This is also true for economics. The action and reaction of supply and demand is best if allowed to be naturally forming. This enables Microeconomics and Macroeconomics to balance and stay stable. This essay will discuss the effect of supply and demand based off the data from the economic computer simulation from class.
Microeconomics
The simulation implemented different Microeconomics and Macroeconomics concepts and principles in the teaching process to show the little picture and big picture of economics. Below are the concepts of Microeconomics that I focused on during my learning.
The simulation included behavioral economics in its teaching. Behavioral economics uses a broader set of building blocks than traditional economics which uses rationality and self-interest. Behavioral economics helps explain why consumers in Atlantis preferred detached homes instead of two bedroom apartments at the fifth year in the simulation. In the simulation Consumers show that a rational decision is the norm for majority of the population but is not the sole factor that Atlantis’s housing market is based off.
The simulation gave a scenario of a big company establishing its operations within Atlantis. This move into the city predicted an increase to the population. The property management consultant suggested increasing the rental rates in response to the increase of demand. It is a Microeconomic factor because it reflects changes on a small scale which impacts the economics of the larger scale. This is the small to large approach.
Macroeconomics
Macro externalities are relevant in the simulation. One of the scenarios was that the city council voted to implement a price ceiling of $1550 on the two bedroom apartments. This was done so families could afford to work and live in the city. The cause and effect of this decision created less supply