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.


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 /




Rupple(Merchants) $9

Diane (self-employee)

Jerry (self-emp)

Hae (self-emp)

Ruby (self-emp)


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



Middle land profit: $15

Rich land profit: $82


Wen Wen Profit: +$5

Ruple lost -$5

Kyle profit $14

Anh profit $9


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


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:


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)


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.