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In this paper, I will attempt to summarize the findings of the economic simulation located on the student website. The economic simulation occurs in a town called Atlantis that rents two bedroom apartments and Good-life is a company which manages the apartments for rent in this town. I will identify two macroeconomic and microeconomic principles present in the simulation and illustrate how these principles are classified as micro or macroeconomics. I will also identify at least one shift of the supple curve and one shift of the demand curve in the economic simulation.
Atlantis is a town with good two bedroom rental apartments. The town is healthily populated and many people are renting these apartments. It is imperative to be aware of what is happening in the local economy in this town, and it is crucial to observe both the macroeconomics and microeconomics perspectives. On the microeconomics perspective, it is critical to consider how people in Atlantis will be affected by the supply and demand of these two bedroom rental apartments. If the prices of these apartments are raised, would people be capable of making the necessary adjustments and be able to keep the apartments? Macroeconomics considers the economy as a whole. Initially, the town of Atlantis was healthily populated and individuals were renting these units. However, when Good Life Company came into town, the demand for the two-bedroom apartments soared with the growing population. A positive change in demand leads to a boost in amounts demanded and a positive change in supply as realtorsâ€™ location themselves to take advantage of the advanced prices. The economy as a whole, with new Good-life Company would be able to afford an increase in the rent price. After some few years, the demand for the two-bedroom apartments declined due to the fact that individuals wanted to buy detached homes.
With regard to supply and demand curve shifts, in the economic simulation, there were many cases reflecting shifts in the demand and supply curve. A higher price is a reason to supply more for any supplier, thus, as the rate of rent increased, so did the number of apartments the company was prepared to lease. In general, the cause for this shift could be maintenance or production costs, which basically means that each extra unit of the product would be supplied at an upper price. As the rate of rent of the apartments increases, so did the number of apartments supplied, and this is a good example of an upward sloping supply curve. On the other hand, the shift in the demand curve is sloping downward.
Shifts in demand and supply in the simulation were caused by a number of factors. Changes in the population changes in Atlantis and in the direction of Good-life management as well as remote areas had an effect on demand and supply in this simulation. Additionally, changes in the choice of tenants for apartments caused the demand for the units to decrease. Good Life Company started to renovate the apartment units into condos, which were for sale, thus causing a decrease in supply and demand. As a result both the demand and supply curve shifted to the left.
Major points in this simulation were equilibrium, supply and demand, price ceilings, and shifts in supply and demand. Evidently, the simulation is based on demand and supply, and is quite useful in recognizing the diverse factors, which can affect it. Equilibrium occurs when quantity demanded equals that of the quantity supplied. The simulation revealed that if the prices of the apartments were below equilibrium, then the quantity of the units demanded surpassed the quantity available and thus, caused a scarcity of available apartments. Such an effect could also cause the price of the rented units to increase. But, if prices were above equilibrium, then it could have been a different scenario. A surplus of available apartment units would obviously force the price down.
How may you apply what you learned about supply and demand from the simulation to your workplace or your understanding of a real-world product with which you are familiar? I am a social worker and my job entails assisting people obtaining their benefits. There is a big demand for people with food stamps, blind, disabled, and aged people to obtain such benefits. Therefore, applying the macroeconomics and microeconomics concepts learned in this simulation will be an easier affair for me. My understanding of these concepts will make it easier for me to understand the supply and demand for such public assistance programs.
The economic simulation is based on the management of two-bedroom rental apartment units in Atlantis town. These units were based on the management of the demand and supply of rental apartments by Good-life Company. The simulation revealed how demand and supply could be affected and how shifts could happen in supply and demand. The simulation also revealed how equilibrium is met.
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