Prof. Fred Foldvary. Econ 1. 25 pts. maximum.

Due Friday, Nov. 3 absolute latest.

Please print, type, or write very legibly.

If you participated in the economic simulation, do problem set #6S.

Others will do #6B below.

Answers may be brief, but should answer sufficiently

1. (5 pts.) describe your role in the simulation.

What did you do? What did you buy?

How much money did you get in total?

Did you put your money in a bank; why or why not?

Did you have cash leftover? Why?

2. (5 pts) Describe the simulation market, using supply and demand.

What was the average price of a candy bar? How much could the typical wage buy?

What determined the prices of the consumer goods?

Did prices change? Did supply and demand shift? How?

Did you observe the law of demand working? Explain.

Describe the role of the landlords.

How did the land rent affect production and profits?

3. (5 pts) How well did the government or absence of government function? Explain.

What was the role of the constitution? Was the government worth the cost?

Evaluate the tax system - could the government have had a better tax system?

If so, why do you think the council did not choose the better system?

How do you think the outcome would have been different with no government?

4. (5 pts.) Was the economy equitable? What was the income inequality?

What was the cause of the economic inequality outcome?

Was it a good, bad, or neutral outcome? Explain all.

5. (5 pts.). Describe the role of the entrepreneurs as merchants and bankers.

Do many or few want to be entrepreneurs?

What decisions does a merchant have to make?

What decisions does a banker have to make?

Did they have good business plans? What role did uncertainty play?

What was the importance of consumer decisions?

#6B for those who did not participate in the economic simulation. 5 pts. each.

Do Questions for Review, top of p. 221, #4, 5, 6

Do Problems and Applications, p. 238, # 6, 7