Report of the Secretary of Commerce, Poh Hoon Chan
Economic Simulation, Econ 232 Public Finance, Prof. Foldvary
Dec. 8, 2009
1: Prerna Landlord of MiddleLand
2: Henry Tan, landlord, RichLand
Landlord can sell the land if wishes
Poor land council: Debbie
Middle land council: Diane
Rich land council: Andrew
President: Andrew
(He said they will rotate the presidency among council members)
[but the presidency did not rotate].
no consistuation rule
proposal for taxing:
1. LVT
2. Tax merchants
tax LVT -->
LVT: first round: 50 fixed amt from each landlord.
adjustment: $70 from the Richland and $30 from Middle land, due to lack of profit from middle landlord.
Banker:
1. Bank for the poor (Saeeda) 4% interest deposit; 5% interest on loan.
2. Competitive Bank (Razia) 2% on deposit and 3.5% on loan
3. Bank for the Rich (Chung) 5% on deposit; 6% on loan
Note: Banker needs receipts for each transactions (with yellow postit)
no central bank; 20% reserve for bank; bank can write bank notes;
the Bank for the Rich doesn't have to take deposit until he gets loan first.
Poor bank got $40; Competitive bank got $35 deposits. zero for Rich Bank
$9 for middle rent flat rate
$15 for Rich rent flat rate
Production function (max Q):
poor land: 2+4= 6
Middle land:4+8 = 12
Rich land: 6+12 = 18
entrepreneurs (Merchants):
WenWen Capital goods; in poor land; Wage $12 ; have to hire from poor land (2 people - Sunny and Greg Steigen)
Produced 5 (+1 for self use) Capital Goods selling price is $10 each.
Kyle is selling Nickels, in Richland; wage is $28. (2 workers: Jack and Ryan)
bought 1 capital goods ($10); selling price is $10. sold 6 of 6.
Ruple is selling is Snickers; in middle land; wage is $12 (workers: Prerna and Nha); bought 1 capital goods $10. selling price is $5. Sold 12 of 12 merchants (sold out)
Anh is selling Holidays snickers; in poor land; wage is $14 (workers: Ronnie and Huan) bought 1 capital good $10. selling price is $8. sold 6 of 6.
Sunny is selling Pencils; in poorland; wage is $13. (2 workers: Debbie and ) ==> CLOSED can't find labor
$100 note = $1; $500 note = $5
Capital goods: action figures / scan trons / blue books / pencils /coins / varies of chocolates / erasers /
Rent:
Prerna:
Rupple(Merchants) $9
Diane (self-employee)
Jerry (self-emp)
Hae (self-emp)
Ruby (self-emp)
Henry:
Kyle (Merchants) $15
Larry (self-emp)
Alfredo (self-emp)
Carlos (self-emp)
Jim (self-emp)
Drew (self-emp)
Greald (self-emp)
John (self-emp)
Merchant in Middle Land pays for the local public good.
No local public goods in Richland, so 1/3 the maximum output.
$100 paid to the King --> no flood.
Council members audit Banks for reserve:
the middle and poor bankers have the reserves (20% at least)
The rich bank has no reserve (shut down) --> default
summary:
Landlord:
Middle land profit: $15
Rich land profit: $82
Merchants:
Wen Wen Profit: +$5
Ruple lost -$5
Kyle profit $14
Anh profit $9
Banks:
Saeeda profit: $4
Razia $1
Chung <bankcrupt>
King deposited $60 on poor and middle banks
Next round:
2 banks: Competitive and poor
Competitive bank: 2 % deposit and 4% loan
poor bank: 4% deposit and 5 % loan
Rent: (fixed rate for everyone -- merchants and self-emp)
Middle rent: $9
Rich rent: $15
Merchants:
Jerry is selling Doves in Richland, wage $26 (workers: John and Alfredo). got 18 Doves. Bought 4 capital goods for $15. selling price is $3. sold 17 of 18. self consume 1. ==> bankcrupt.
Roopal is selling Hershys in Middle, wage $22 (workers:Prerna and Nha). selling price is $6, 10. profit 16.. Bought 1 capital goods $15.
Kyle is selling snickers in Richland, wage is $27 (workers: Jack and Ryan). Bought 0 capital good. selling $4. sold 18 of 18. profit is $3.
WenWen is selling capital goods in poorland, wage is $15 (workers: Sunny and Greg) selling price is $10 and later $15. Got 6 capital goods. Sold 6 of 6 ($10 for 1) and ($15 for 5) profit is $40.
Note: Henry bought 4 Capital goods
Carlos is selling pencils in middle land, wage is $20 (workers: Huan and Diana) got 12 pencils. Bought 1 capital good for $10. Selling price is $7.
sold 12 of 12. profit $6
Merchants pay workers and rent:
Landlord:
middle land rent: (Prerna $9)
Ruple (Merchant)
Carlos (Merchant)
Ruby (Self-emp)
Rich land rent: Henry ($15)
- Kyle (Merchant)
- Gerald (Merchant)
- Larry (self-emp)
- Jim (Self-emp)
Bankers:
Comp: profit $17
Poor: profit $26
land lord:
middle: $20 in tax
rich: $80
Merchants in MiddleLand and RichLand paid for the local public goods.
Council members paid $100 to the King --> no Flood.