...Economics is the theories of social science that analyse the production, distribution and consumption of goods and service. Economics studies how individual and government allocate resource to satisfy the market demand. Economics can divide into two which is microeconomics and macroeconomics. According to Jeffrey Glen (2013), microeconomics is a study about the insinuation of individual human action, especially about how the decisions made affect the distribution and implementation of scare resources. Microeconomics show the concept of supply and demand, how a business establish prices, how individuals make efficient decisions and how individuals cooperate with one another. Microeconomics is not an explanation for what happen in a...
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...The study of economics allows us to understand how governments, employers, and households make decisions given the options and constraints that each of them has. This week we were assigned a scenario that involved decisions that were made by an employer and how those decisions impacted both the employer and individual households (University of Phoenix, n.d.). Macroeconomic Vs Microeconomic Principals Macroeconomics and microeconomics are both subcategories of economics. Macroeconomics involves a much broader approach to the economy and it involves decisions that the government makes in trying to regulate the economy. Microeconomics involves the study of how market demand and supply affect the decisions that households and firms make (Difference Between Net, n.d.) In the scenario that we reviewed, the government made macroeconomic decisions by implementing a price ceiling for rents, also known as a rent control policy. The choices that Goodlife had to make in response to that decision were also macroeconomic because Goodlife had to make a decision to not rent as many apartments, even though it had the capacity to rent more apartments. The government response to that decision would also be macroeconomic. Goodlife engaged in several microeconomic decisions by adjusting the supply of apartments when needed. In year one, Goodlife made a decision to lower rent prices in order to balance the excess supply with the market demand. Goodlife made another microeconomic decision in year...
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...Lowering the amount of available units was no easy task for Good Life management and likely would not have been achieved with a solid understand of the principles of the micro and macroeconomics and the supply and demand curve. This simulation has taught the importance of economics and how the play an important part of everyday life. Micro and macroeconomics play a key role in the everyday lives of people and corporations. In the simulation in this weeks assignment Atlantis is a prime example of just how often people come into contact with situations with two important factors of economics. The two important factors are supply and demand and they affect everything that we as people do in everyday life. Understanding supply and demands makes consumers, the supplier and us, determine when it is best to buy and best to sell. Understand this principle enables us to make more informed purchasing and selling decisions. There are a number of real world examples of how micro and macroeconomic principles appear in this weeks assignment simulation, but mostly macroeconomics come into play because it is in the perspective of the business franchise, Good Life Management. Supply and demand are two microeconomic principles that appear in the simulation and in regard to the rental apartments in Atlantis, supply and demand is what is used to find balance in the rental housing...
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...Supply and Demand Simulation ECO/365 – Microeconomics Atlantis is a great town to live in. There is especially a great opportunity in the rental real estate market and only one company to supply rental apartments. The key is to apply the laws of supply and demand to suit the needs of the business to be the most profitable. Two Microeconomic and Macroeconomic Principles or Concepts Scenarios one and three are microeconomic principles because they deal with the part of economics that is about single factors and the effects of individual decisions. In both scenarios levels of vacancy were individual decisions and prices were adjusted to meet the decisions expectations. Macroeconomics studies the entire economy. Colander (2010) stated, “It considers the problems of inflation, unemployment, business cycles, and growth” (p. 15). The fourth and seventh scenarios are examples of macroeconomics. The fourth scenario the population is going to grow because a new corporation is moving to town and with it many employees. This affects the entire economy of Atlantis because unemployment will go down and growth in many sectors will take place, particularly in real estate since these employees will need places to live and most will prefer to live near their place of employment. In response to this growth GoodLife’s apartment leases will go up from $1150 to $1400 because demand went up. As demand goes up prices go up but eventually, as shown in the seventh scenario, some...
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...ECO/ 365 Wednesday, March 13, 2013 William Mason Supply and Demand Simulation Paper In the simulation, Goodlife Management is a company who rents and leases two-bedroom apartments in the city called Atlantis. The simulation helped students understand shifts in demand and supply, the effect of a price ceiling on the quantity demanded and quantity of supplied two-bedroom apartments, and the equilibrium point as well. “Microeconomics is the study of how individual choice is influenced by economic forces” (Colander, 2010). Individuals in this case refer to both people and businesses. Two microeconomic principles that are apparent in the simulation are the supply of two-bedroom apartments for rent, and the demand for renting them. In all the scenarios, students were challenged to either increase or decrease rental rates on behalf of Goodlife Management, depending on how high or low the demand of two-bedroom apartments were. On the other hand, macroeconomics is the study of the economy as a whole and considers problems of inflation, unemployment, business cycles, and growth (Colander, 2010). The increase in population, or growth, had an impact on the apartments because there was a parallel increase in demand for rented apartments. The reason for an increase in population was the fact that a new business was opening up in Atlantis, thus creating job opportunities in the city. Because the employment rate in Atlantis was rising, the demand for renting apartments increased as well...
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...Microeconomics and the Laws of Supply and Demand Terry Cerami ECO/365 September 21, 2015 David Flesh Microeconomics and the Laws of Supply and Demand Utilizing the supply and demand simulation ("University Of Phoenix", 2014), I will illustrate two macroeconomic and two microeconomic principles demonstrated in the simulation and expound on why these principles are categorized as microeconomic or macroeconomic. Also, one shift of the demand curve and one shift of the supply curve from the simulation will be identified with explanations for the shifts. Further, I will analyze the influence on decision making in correlation with quantity and the equilibrium of price and how these concepts of demand and supply can be pragmatic in everyday business or within the current work environment. Finally, I will explain how price elasticity of demand has an immense impact on products pricing strategy and its purchase from the consumer. Macroeconomic and Microeconomic Principles The first macroeconomic principle demonstrated within the Supply and demand Simulation is Price Ceilings. Price Ceilings ensue through legislation as laws are enacted establishing a lawful ceiling of how high the cost of a product can be ("Price Ceilings", n.d.). When a price ceiling is established, there is further demand than what is available at the equilibrium price. This is a result of there being a sufficient supply in quantity of demand than supplied quantity. For example, in the simulation the...
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...Microeconomics and the Laws of Supply and Demand Vanessa Hill ECO/365 October 8, 2014 The Supply and Demand Simulation categorized the application of Macro and Microeconomic principles as linked to the real world. It concentrates on that many times the vacancy level can be personal, may rest on individual decision, and the market prices can be easily adjusted to meet different expectations. It also talks about the role of the shift of the supply curve and the demand curve. Demand refers the quantity of a product or service desired by buyers. When demand goes up, usually the prices of the products are expected to rise. The Supply and Demand simulation also is a appropriate case of what we experience everyday as part of our professional lives. The concept helped the client understand the factors that affect shifts in supply and demand on the equilibrium price and quantity. Economics are building blocks on understanding businesses on a financial standpoint and the adjustment curves in supply and demand. Microeconomics is the emphases of the marketplace factors of demand and supply, which normally determines the change of levels in price. This is the part of economics that features particular factors of individual choices. Like change in microeconomics, macroeconomics is the focused area of economic development and changes in general income. Each change in shift affects equilibrium of price, quantity, and consuming behaviors. Concepts of microeconomics...
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...the rentals. The simulation helped students in determining rental rates, vacant apartments, and the quantity of apartments that are rented for any given month. According to the text, macroeconomics is the study of the economy in its entirety. Macroeconomics is studying unemployment, business cycles, business growth, and inflation. Microeconomics refers to studies of individuals and decisions made in business. An effect of a microeconomic result would be a higher demand for maintaining the rented properties by an increase in rented apartments and employment would increase. If Goodlife wanted to reduce the vacancy rate, lowering prices of two bedroom apartments would increase demand of the apartments. Prices of the two bedroom apartments will rise as the demand for a two bedroom apartment increases. This equates to the microeconomic effect with increased revenue for Goodlife, Increased revenue equates to more money spent building additional buildings, maintaining and up keeping the apartments to for tenants to live in. This simulation was isolated to specific area, Atlantis, and being limited to a specific area I would feel that this is a microeconomic principle. Thinking about this in macroeconomics...
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...The study of economics is the correlation between an individual’s wants and needs as well as the social, political, and decision-making process. Supply and demand is a large part of economics. This paper reviews the student simulation and how supply and demand affects the two-bedroom rental apartments in Atlantis as well as Goodlife Management properties. In addition, this paper will describe how supply and demand relates to both microeconomics and macroeconomics. Furthermore, this paper will explain how specific factors affect shifts in supply and demand on equilibrium price and quantily and how it affects a consumer’s purchasing and the firm’s pricing. Economics is separated into two sections: microeconomics and macroeconomics. Colander (2010) states, “Microeconomics is the study of individual choice, and how that choice is influenced by economic forces. Macroeconomics is the study of the economy as a whole. It considers the problems of inflation, unemployment, business cycles, and growth” (p. 15). There are microeconomic and macroeconomic principles and concepts addressed in the stimulation. Microeconomics A firm ability to adjust pricing affects revenue. To increase revenue and decrease occupancy Goodlife decreased the monthly rental rate from $1300 to $950 a month. In decreasing the monthly rental rate, the demand for the apartments increased causing a decrease in the vacancy rate. An increase in occupancy contribiuted to an increase in revenue.. In decreasing the...
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...Supply and Demand Simulation Joseph Silva Eco 365 FARIBA KHERADMAND 5/6/14 In this paper we will be observing the key points of microeconomics and how it relates to week twos supply and demand simulation. We shall go over and review the basic principals on how the supply and demand curve works and is effected in certain senarios. Also in this summary we will go over the affects on equlibrium price, quantiy, and decision making. Finally we will talk about the firms stategies how it relates to the senario. The senario in this simulation brings you to a new city called Atlantis where you are a property manager of some two bed room apartments. Your job is to manage the rental rates and make sure things don’t get out of hand in reguads to shifts in the demand and supply. The first topic we shall review in this paper is the miro and macro economic principles that came up in the simulation. From the the microeconomy stand point the two concepts that came up were the supply and demand as well as price cellings. The supply and demand was the most obvious one to choose. In the simulation you had to figure out how much the supply and demand curve shifted. In most cases the demand curve was always shifting due to the preferences of the simulation always changing. If the population increased then the demand for the apartments increased. Same thing if the preference changed it could cause and increased affect or a decreased...
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...Supply and Demand Simulation Name University Supply and Demand Simulation The supply and demand simulation is based on an apartment management company which is located in Atlantis and how various economic factors impact it. The supply and demand concept is very important and critical in microeconomics as well as macroeconomics. The microeconomics concept is classified within the changes of the equilibrium and the supply and demand concept in which the apartment community operates within. While in the macroeconomics concept it is classified as price ceilings and elasticity, which shows that there is a large impact on the overall apartment market locally. The supply curve and demand curve showed that there could be a significant change within the economic environment if there were to be any changes within them. Examples of what any shift or change to the supply curve and demand curve have very different results depending on the shift. If the supply curve shifted to the right, it would result in an increase in apartments available for renting. If the apartment management company could accomplish this by expanding the apartment buildings to allow for more units to be occupied. If the demand curve shifted to the left this would indicate a decrease in the demand of its consumers and result in fewer apartments being occupied. The management company faced this in the simulation and caused for them to lower the prices to compensate for the widespread desire for property ownership...
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...Supply Demand Simulation Macro and Microeconomic Principles From the simulation, the two major microeconomic principles are supply and demand. The simulation majorly focuses on the supply and demand of rental properties in Atlantis. In addition, the influences on supply and demand form the major topic discussed in the simulation. The macroeconomic factors clearly stated in the simulation are changes in the population trend, choosing to rent or buy apartments and factors that directly influence these changes. Colander (2010), states that the quantity demanded always increases with falling prices and quantity supplied reduces with receding market prices (Colander, 2004). The company’s supply is almost 2,000 apartments; the company speculates at reducing the vacancy rates to 15 percent to increase demand, a clear applicability of the demand law. Demand and Supply Shifts The availability of rental apartments, demand for rentals, number of potential renters and the pricing are the common factors that affect supply and demand from the simulation. From the simulation, the demand curve slopes downwards; rising prices decrease demand and vice versa. On the other hand, the supply curve slopes downwards; the quantity of apartments increases with price increases in Atlantis. In addition, higher number of apartments exerts pressure on pricing leading to lowering of prices and for GoodLife to have higher number of renters, they must reduce apartment prices. On the contrary, lower number...
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...Managerial Economics and Decision Sciences HOMEWORK: REVENUE MANAGEMENT BY A RENTAL CAR COMPANY:1 You are a consultant hired by a major national rental car company that is seeking to improve its pricing strategy. In particular, it is considering adopting a strategy of customized pricing tailored to the underlying micro-markets that it might face. In the rental car business (as in the hotel and resort business), price customization is known as revenue management. As a test case, your client is considering a pricing experiment at Lambert Airport in St. Louis, Missouri, a location at which your client has dominant market share and thus can safely ignore possible reactions of competitors. Careful market research has revealed that the St. Louis market is composed of two micromarkets. The first comprises business travelers; the second comprises vacation travelers. The demand curves for these two micro-markets are given below: Micro-market Business travelers Vacation travelers Demand curve equation Q1= 3,600 – 20P Q2= 3,000 – 30P In the table above, P is the daily rental rate, while Q1 and Q2 are the numbers of vehicles rented per day by business travelers and vacation travelers, respectively. Like airlines, the rental car business is one in which the marginal cost of serving an extra customer is nearly zero. For this reason, throughout this exercise, we will assume that your client’s MC = 0. (Of course, your client has fixed costs, but as an astute practitioner of microeconomics, you...
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...Microeconomics and the Laws of Supply and Demand The first microeconomic policy that I noticed in this simulation, was the company GoodLife's decision to try and reduce their rental vacancy rate while still increasing the revenue. This is a microeconomic concept because it focuses solely on the company's revenue and profit and does not take a look at how this will affect the bigger picture. By decreasing the price of rent at their apartments, they are increasing the quantity of rooms demanded. This in turn increases revenue because less apartments are empty. Another example of a microeconomic concept that is demonstrated in this simulation can be shown by GoodLife's decision to try and rent out all of their rooms. When they do this they actually have to increase the price of rent. The reasoning for this is because the more rooms that are rented out the more maintenance the company has to keep up. This is a good example showing that as you increase the price of the apartments, the number of apartments supplied to prospective clients also increases. A macroeconomic concept can be seen when the city of Atlantis begins to change and many more new companies move into the town. With the rise of the population, the city is beginning to notice more congestion in the town and a lack of housing. This is a macroeconomic concept because it the lack of housing is affecting the entire town's economics. The city also has plans on regulating the price of rent which can make it harder...
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...the subject of macroeconomics and microeconomics, supply and demand is a crucial conception. The fictional apartment complex and the management company, located in the fictitious city of Atlantis and the economic effects related to supply and demand. These factors include equilibrium as well as supply and demand. The concepts in macroeconomics can also be classified as price ceilings and price elasticity because of the impact on the economy and the area. In the first portion of the simulation GoodLife would have some assistance in determining the rate of vacancy of two bedroom apartments in the city of Atlantis. The apartments are rented out on a month to month basis lease. Maximizing the profits and also reducing the rate of vacancy from 28 percent to 15 percent, while also reaching higher revenue. The rate for renting was at $1300.00 then reduced to $950.00. This would then increase the demand from 1200 up to 1900. This would then lead the company to a surplus of apartments available at 100 vacant, and the revenue to $1.81 million. In the section following, would then introduce a concept of the supply curve where the price to lease would be based on apartments available in the amount of 2,500. At this point when the rate for renting was increased, there were more apartments vacant. This would indicate the slope directing upward, also stated in macroeconomics. In regards to curve shifts in the stimulation can be based off of the economic standing. A higher price could be...
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