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Scipio · 09-04-2003, 10:16 AM

In my economics class (college, but still basic stuff), we did a variation on the usual fake money market idea.

There were 12 buyers and 12 sellers (or however many). Each buyer had a different maximum that they could buy at, and each seller had different fixed costs. The richest buyer had like $400, and the poorest had $320 or $330. They were spaced out at $10 intervals. Like a real economy, the system favors buyers that are willing to spend extra of money, and sellers that can produce at very low costs.

The game took place over 5 rounds, and it showed how an equilibrium price is established. After the first few, it was pretty clear that the market set the price at about $360, meaning the high cost producers couldn't compete, and the low cash buyers couldn't buy.

The remarkable part was that before hand, the professor made a graph of the buyers and sellers, and predicted not only the price, but also the volume of trade that would take place. All it was was a supply curve and a demand curve, but seeing it demonstrated like that was very revealing.

09-04-2003, 10:16 AM	#18 (permalink)
Scipio Mencken Location: College	In my economics class (college, but still basic stuff), we did a variation on the usual fake money market idea. There were 12 buyers and 12 sellers (or however many). Each buyer had a different maximum that they could buy at, and each seller had different fixed costs. The richest buyer had like $400, and the poorest had $320 or $330. They were spaced out at $10 intervals. Like a real economy, the system favors buyers that are willing to spend extra of money, and sellers that can produce at very low costs. The game took place over 5 rounds, and it showed how an equilibrium price is established. After the first few, it was pretty clear that the market set the price at about $360, meaning the high cost producers couldn't compete, and the low cash buyers couldn't buy. The remarkable part was that before hand, the professor made a graph of the buyers and sellers, and predicted not only the price, but also the volume of trade that would take place. All it was was a supply curve and a demand curve, but seeing it demonstrated like that was very revealing. __________________ "Erections lasting more than 4 hours, though rare, require immediate medical attention."