ECO 201 Project Template [Throughout this template, replace the content in bracketed text with your own responses, and deleted any bracketed instructions (including these).] [The Introduction section of your report is provided and should remain standard in all submissions.] [The placeholders for your data visualizations (e.g., charts, graphs, and tables) should be replaced with the appropriate indicated images in each case. To create an isolated image from the simulation data, it is recommended that you use a snipping tool to copy and paste your data visualizations into this template. See How to Use the Snipping Tool (Beginner’s Guide) for more information if you use a PC. A captioned version of this video is available: How to Use the Snipping Tool (Beginner’s Guide) (CC). Or, see Is There a Snipping Tool for Mac?.] Memo To: My Business Partner From: [Insert your name] Date: [Insert date] Re: Microeconomics Simulations Introduction This memorandum report identifies and explains key microeconomic principles using a set of simulation games. The outcome of these games illustrate how microeconomic principles can be applied within real-life situations to help us make better business decisions. This report is a summary of the simulations I played and their results, which include the key takeaways and their significance, for your review and reference. It is divided into the following sections: 1. 2. 3. 4. 5. 6. Comparative Advantage Competitive Markets and Externalities Production, Entry, and Exit Market Structures (including the Price Discrimination and Cournot simulations) Conclusions References Comparative Advantage [Replace this area with the Comparative Advantage Simulation Results.] Figure 1.1 [Insert your responses to the following questions: How does this simulation demonstrate how individuals evaluate opportunity costs to make business decisions? Explain what role the production-possibility frontier (PPF) has in the decision-making process.] [Explain how comparative advantage impacts a firm’s decision to engage in trade. Would a business’s decision to trade cause a change to its PPF? Provide specific reasoning to support your claims.] Competitive Markets and Externalities [Replace this area with the Competitive Markets Simulation Results.] Figure 2.1 [Replace this area with the Externalities (with Policy Intervention) Simulation Results.] Figure 2.2 [Insert your responses to the following questions: What impact do policy interventions have on the supply and demand equilibrium for a product? Provide specific examples from the simulation to illustrate.] [What are the determinants of price elasticity of demand? Identify at least three examples. Based on the outcome of the simulation, explain how price elasticity can impact pricing decisions and total revenue of the firm.] [Based on the results of the simulation, can policy market interventions cause a change in consumer or producer surplus? Explain why using specific reasoning.] Production, Entry, and Exit [Replace this area with the Production Entry and Exit Simulation Results.] Figure 3.1 [Insert your responses to the following questions: Analyze a business owner’s decision making regarding whether to enter a market. For example, what factors determined the driver’s entry and exit into the market in the simulation? Use economic models to support your analysis.] [How does a business owner apply the concept of marginal costs to decide how much to produce? For example, how did the driver determine how many hours to drive each day? Use economic models to explain.] [How does the impact of fixed costs change production decisions in the short run and in the long run? Use the average-total-cost (ATC) model included in the textbook to demonstrate this impact.] Market Structures [Complete the table by selecting the appropriate response from the drop-down select menu within each cell, except for the final column in which you will enter your text-based response.] Market Structure Perfect Competition Number of Firms Choose an item. Type of Product Sold Choose an item. Price Taker? Choose an item. Price Formula Choose an item. Freedom of Entry? Choose an item. Short-run Profit? Choose an item. Long-run Profit? Choose an item. Monopolistic Competition Choose an item. Choose an item. Choose an item. Choose an item. Choose an item. Choose an item. Choose an item. Monopolies Choose an item. Choose an item. Choose an item. Choose an item. Choose an item. Choose an item. Choose an item. Oligopolies Choose an item. Choose an item. Choose an item. Choose an item. Choose an item. Choose an item. Choose an item. Table 4.1 Industry Examples [Insert two to three example industries that meet the criteria of the market structure.] [Insert two to three example industries that meet the criteria of the market structure.] [Insert two to three example industries that meet the criteria of the market structure.] [Insert two to three example industries that meet the criteria of the market structure.] [Insert your responses to the following questions: Explain what market inefficiencies derive from monopolies and monopolistic competition. Use examples from the textbook to support your claims.] [How do firms in an oligopolistic market set their prices? Use examples from the textbook to support your claims.] [Explain how firms that compete in the four different market structures determine profitability. Use examples from the textbook to support your claims.] Conclusions [Insert your overall conclusions about the relevance and significance of microeconomics. How will microeconomics principles impact your business decisions moving forward? Provide recommendations to your business partner for your future business venture.] References Mankiw, N. G. (2021). Principles of microeconomics (#9 edition). Cengage. [Add other citations, as needed, in APA format]. How to Play • Half of you are buyers, half are sellers. • Buyers can submit Bids. Sellers can submit Asks. o • • • Use slider to choose value and press Bid or Ask You buy an orange if: o you click "BUY AT THE LOWEST ASK" OR o you have the highest Bid and someone either clicks "SELL AT THE HIGHEST BID" or Asks less than your Bid. You sell an orange if: o you click "SELL AT THE HIGHEST BID" OR o you have the lowest Ask and someone either clicks "BUY AT THE LOWEST ASK" or Bids more than your Ask. The price of every transaction in your group is depicted in the chart on your screen. Payoff Computation • Buyers: Item's value displayed on your screen. For each item you purchase o • Sellers: Item's cost displayed on your screen. For each item you sell o • earnings = item value - price you pay earnings = price you receive - item cost Total earnings equal sum of earning from all your transactions Example • Transaction price = $1.08 • Value to buyer = $1.32; Cost to seller = $0.74 Buyer Seller value – price = earnings $1.32 – $1.08 = $0.24 price – cost = earnings $1.08 – $0.74 = $0.34
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