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.