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.