Economics Games

All of the resources for business that are important –  money,  people,  raw materials… are scarce and must be managed carefully if you choose to spend a dollar on development, that’s a dollar you can’t spend on marketing or hiring extra employee.  You have to organize all the places you could efficiently spend your investing and prioritize them by how much value they will add to your business.  As you increase production, some of your costs will decrease because of economies of scale.  You will save when you buy materials and ingredients in larger quantities. The lower costs per unit may be due to bulk buying of raw materials, marketing costs spread over more units, or more efficient labour.

Also it is important to realize what are your competitors doing and you can decide how to coordinate your business. You are able to set a price if you can show how the product has a uniqueness or innovative quality and is worth more for the value.  Of course, the price covers costs (cost of raw materials and the cost of operating business)

For exploring the following three free games on running business, and managing sales and purchases through pricing, you can find out how challenging to manage the business in this competitive market.

v  Farmersi  (http://farmersi.net/

v  Diner City (http://games.t45ol.com/play/6132/diner-city.html)

v  McDonald’s video game (http://www.mcvideogame.com/game-eng.html)

Graphing Changes to Demand

In economics, the demand curve is the graph depicting the relationship between the price of a certain commodity and the amount of it that consumers are willing and able to purchase at that given price. It is a graphic representation of a demand schedule. An increase in demand then, means an increase in quantities demanded at each price, which is a total increase in the demand schedule, which is illustrated by a rightward shift in the demand curve. Similarly, a decrease in demand means a reduction in the quantities demanded at each price – a decrease in the demand schedule – and this is illustrated by a leftward shift in the demand curve.

Change in demand is a change in the quantities demanded at every price, caused by a change in the determinants of demands. Several factors other than a change in the price level may change in demand. The first factor that affects our willingness to purchase a product is our own particular preference. Tastes change over time and are influenced by many other things.

The second factor affecting the demand for a product is the income of consumers. The demand for normal product will increase as a result of our income increase, in contrast, the demand for inferiors products will decrease as a result of our income increase.

The third important factor is the prices of related products. A change in the price related products will affect consumer’s willingness and their ability to purchase a particular product. They may be related as substitutes, or complements. Substitute as products that can serve as replacement for one another. When the price of one increase, demand for the other will goes up. The demand will change if the price of complement goods changed as the complement goods that the products ‘go together’.

The fourth factor is the expectations of the future price, incomes and availability. Future expected prices and incomes can affect our present demand for a product, and does the prospect of a shortage.

Other than these four factors, the size of the market population will affect the demands for all products. A change in the distribution of incomes will lead to an increase in the demand for some products and a decrease in the demands for others. In addition, the age composition of the population also will affect the demand for difference products.

For example, if the % of the total income earned by those over 65 years of age rises, while the % going to those under the age of 24 falls, then, we would expect to see an increase in the demand for holiday cruises ad a decrease in the demand for entry into popular night clubs.

Production possibilities

These production possibilities graphs are a graphical representation of the various combination of maximum of output that can be produced from the available resources and technology. Three assumptions that lie behind the curve: full employment, the use of the best technology and the production efficiency. As economy’s production level of any particular item increase, it’s per unit cost of production rise – this is the law of increasing cost. And the technology change plays an important role on the production possibility curve. Two different growth rates of two different economies are emphasis on the output choices by two economies.

Economists see resource as scarce that is not able to produce all goods and services to satisfy everyone. In the face of unlimited wants and limited production resources, choices become a forced necessity. Because of these choices, the decision to produce one thing means that same other thing will not be produced. The value of next best alternatives that is given up as a result of making particular choice – this is opportunity cost.

In our life of limited times in a day, we do make choice to do the worthy and meaningful things. 24 hours a day: 8 hours working, 8 hours sleeping, and 2 hours in transportation, 2 hours cooking and eating and 2 hours using washroom, 2 hours your choice (watching movies, jogging, house cleaning... etc.). One significant opportunity cost I have experiencing by returning school, I give up my part time job for $20 per hours + bonus. In general, I prefer to continue my education and I would like to have a bright future in my career.