Eco 365 - Individual Assignment

In this week’s assignment the simulation of which examined the effects of supply and demand on the pricing and availability of real world goods was performed. In this instance, the simulation looked at pricing and availability of two bedroom apartments in the of city of Atlantis, which was fictional. The simulation evaluates a couple several different situations, outside market factors and governmental influence. By moving through the simulation and adjusting the pricing levels of the apartments and the number that are being made available to be rented, the simulation indicates the effects of things like rental control laws, new employers moving into the area, and the change in trend from apartments to homeownership and then back again.

In this simulation, concepts from the study of both microeconomics and macroeconomics are observed. Macroeconomics covers elements that affect the whole economy of an area, not just one company. Events such as scenario four’s introduced Lintech into the area changes the economy of the entire city, not just GoodLife’s Inc’s financial situation. Good Life saw an increase in demand for apartments because of the influx of workers in the area. However, as through the simulation it was evidenced the increase in price due to the increase in demand because of the influx of businesses into Atlantis made GoodLife’s apartments unaffordable for many people and the city council stepped in putting a cap on rent. In scenarios one and three exhibited microeconomic concepts far better, with the prices and the balancing of revenue generated from rentals versus the cost of maintaining the apartments being decided by and affecting only the business of GoodLife itself, with no outside influence from other companies or governmental influence.

In the first couple scenarios were excellent examples of the supply and demand curves shifting based on market or internal influences. In scenario 1, the vacancy rate was reduced for to 15 percent for an...