Supply and Demand
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- Date Submitted: 01/13/2014 11:21 AM
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Supply and Demand Simulation
Daliah Adams
ECO/365
Microeconomics is “the analysis of the decisions made by individuals and groups, the factors that affect those decisions, and how those decisions effect others". Microeconomic decisions by both firms and individuals are motivated by cost and benefit considerations. Costs can be either in terms of financial costs such as average fixed costs and total variable costs or they can be in terms of opportunity costs, which consider alternatives foregone.
Macroeconomist’s consider questions such as "What determines how much a consumer will save?” "How much should a firm produce, given the strategies their competitors are using" and "Why do people buy both insurance and lottery tickets?" (About.com)
Macroeconomics can be best understood in contrast to microeconomics, which considers the decisions made at an individual or firm level. Macroeconomics considers the larger picture, or how all of these decisions sum together. An understanding of microeconomics is crucial to understand macroeconomics. To understand why a change in interest rates leads to changes in real GDP, we need to understand how lower interest rates influence decisions, such as the decision of how much to save, at the firm or household level. Once we understand how an individual, on average, will change their behavior we will then understand the large-scale relationships in an economy. (About.com)
The microeconomics principle or concept from the simulation would be the decision to raise or lower the rent according to the current market trend at that time, as more people demanded rented apartments; it resulted in an increase in demand in turn, causing the demand curve to shift to the right. As the rental rate increased the quantity demanded also decreased because along a demand curve, an increase in price resulted in a decrease in quantity demanded. The macroeconomics principle or concept would be when Hal Morgan, the regional property manager would...
Daliah Adams
ECO/365
Microeconomics is “the analysis of the decisions made by individuals and groups, the factors that affect those decisions, and how those decisions effect others". Microeconomic decisions by both firms and individuals are motivated by cost and benefit considerations. Costs can be either in terms of financial costs such as average fixed costs and total variable costs or they can be in terms of opportunity costs, which consider alternatives foregone.
Macroeconomist’s consider questions such as "What determines how much a consumer will save?” "How much should a firm produce, given the strategies their competitors are using" and "Why do people buy both insurance and lottery tickets?" (About.com)
Macroeconomics can be best understood in contrast to microeconomics, which considers the decisions made at an individual or firm level. Macroeconomics considers the larger picture, or how all of these decisions sum together. An understanding of microeconomics is crucial to understand macroeconomics. To understand why a change in interest rates leads to changes in real GDP, we need to understand how lower interest rates influence decisions, such as the decision of how much to save, at the firm or household level. Once we understand how an individual, on average, will change their behavior we will then understand the large-scale relationships in an economy. (About.com)
The microeconomics principle or concept from the simulation would be the decision to raise or lower the rent according to the current market trend at that time, as more people demanded rented apartments; it resulted in an increase in demand in turn, causing the demand curve to shift to the right. As the rental rate increased the quantity demanded also decreased because along a demand curve, an increase in price resulted in a decrease in quantity demanded. The macroeconomics principle or concept would be when Hal Morgan, the regional property manager would...