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Dismal Science Software®
SimEcon®
Economic Issues and Principles
Goals of SimEcon®
• Develop an interactive instructional tool
• Add value to economic education• Improve student learning• Attract students to economics• Increase instructional access
SimEcon® ModulesBasic Micro Models Basic Macro Models
•Markets•Competition•Monopoly•Labor
•Macro1•DrugWars•Banking•E-Growth
Advanced Micro Models Advanced Macro Models
•UtilityMax•CostMin•GasStations•Externalities
•Macro2•Macro3•Exchange$•$Distribution
• Operates with a graphical interface
• Runs on Microsoft Windows
• Uses object-based programming features
• Contains initial conditions for each module
• Provides tabular and/or graphical results
SimEcon® Design and Operation
SimEcon® Uses
• Individual student
assignments
• Group lab or activity sessions
• Distance-learning modules
• On-line course assignments
Markets Module
Shows how markets work. You change supply or demand factors and observe the effects on market equilibrium. You may also regulate the market with price or quantity controls and review the results.
Initial ConditionsDemand• Income• Butter Price• Corn Price
Supply• Rainfall• # of Farms• Seed Cost
Initial Equilibrium
• Price• Quantity
Regulate Market Control Price
• Price Ceiling• Price Floor
Control Production
Markets Module
Disturb Market• Demand • Supply
Results• New Equilibrium Price and Quantity
Results• With Regulation• Without Regulation
Competition Module
Shows how a competitive firm determines
its price and output. You select the quantity
of output that maximizes short run profits as
price and costs change and see the results.
Short Run Costs
• Marginal Cost• Average Cost
Set Firm Output
• Current Market Price Provided• Set Output Level
Firm Results
• Price• Costs• Profit Margin• Total Profit• Equity
Competition Module
Expert Analysis
• Evaluation of Output Decision
Monopoly ModuleShows how a monopolist maximizes long run
profits as its costs and output change. You
may also regulate it by breaking up the
monopoly and/or applying marginal or
average cost pricing policies.
Initial Conditions• Total Output• Total Fixed Cost• Total Revenue• Total Cost• Total Profit• Total Equity• Price• Marginal Revenue• Marginal Cost• Average Total Cost
Choice Variables
• Total Fixed Cost• Output
Monopoly Module
Regulate Monopoly
• Number of Firms• Price
Results of Regulation for
Pure Monopoly PricingAverage Cost PricingMarginal Cost Pricing
• Total Cost• Average Cost• Price• Industry Output• Profit
Output Results• New Equilibrium • Price and Quantity
Labor Module
Shows the impacts of labor market disturbances
on labor market equilibrium. You can see how
discrimination affects the employment and
wages of workers who were discriminated
against and those who were not. You can also
try to reduce the burden of discrimination on its
victims.
Initial Conditions
Demand• Price of Bread• Oven Cost• Price of Flour
Supply• Population• Participation Rate• Cook’s Wage Rate
Initial Equilibrium
• Price• Quantity
Discriminate
Control discrimination among Pildians
• Big Pildians• Little Pildians
Labor Module
Disturb Market
• Demand • Supply
Results
• New Equilibrium Price and Quantity
Results
• With Discrimination• Without Discrimination
UtilityMax Module
Shows how a consumer maximizes utility
with a limited income. You choose quantities
of two goods depending on the consumer’s
preferences, prices, and income, and see the
results. Income and substitution effects are
reported for price and income changes.
Initial Conditions
• Price of Beer• Price of CDs• Consumer’s Income
Set Preferences
• Preference A• Preference B
Select Quantities
• Beer• CDs
UtilityMax Module
Change Budget
• Price of Beer• Price of CDs• Consumer’s Income
Consumer Results
• Total Utility• Marginal Rate of Substitution
• Maximum Possible Utility
New Consumer Results
• New Maximum Utility• Income and Substitution
Effects
CostMin Module
Shows how a firm arranges its production
process so as to minimize the total costs of
its product. You choose the number of
variable inputs and the technology the firm
adopts and view the results of the firm’s
output and production costs.
CostMin Module Select Inputs
•Select Number of Variable Inputs
•Select Technology
Graphs
•Isocost / Isoquant
•Long Run Average Cost / Marginal Cost
Production Results
•Output•Total Cost•Average Cost•Marginal Costs•Marginal Products•MRS
GasStations Module
Shows how a monopolistically-competitive
firm operates. You manage the firm so as
to maximize short-run profits by selecting a
location and price of gasoline and see the
results over several months of service.
Initial Conditions
• Rent at Location 1• Rent at Location 2• Current Price of Gas
Set Preferences
• Location 1 or 2
Select Gas PriceGasStations Module
Change LocationOperation Results
• Gallons Sold• Total Revenue• Total Cost• Station Rent Increase
Executive Summary
• Months in Operation• Total Profits• Total Gallons Sold• Average $/Gallon
Externalities ModuleShows the economic results of two different types of externalities
and appropriate policies to internalize these externalities.
In Positive Externalities, you subsidize vaccine production and
development costs in order to maximize total net benefits to society from
providing flu shots. You may view the results for a competitive or
monopolistic vaccine market.
In Negative Externalities, you use pollution permits or taxes to control
pollution in the steel industry in order to maximize total net benefits to
society.
Initial Conditions• Government Spending• Social Net Benefits Lost• # of Flu Shots• Price of a Flu Shot• MSB of a Flu Shot• MPC of a Flu Shot
Positive Externalities ModuleChoices
• Development Cost• Market Structure• Subsidy Type
Results of Market Choices
• Vaccine Price• Marginal Private Cost• # Vaccinated• MSB• MSC• Total Profit• Total Social Net Benefits
Initial Conditions•Production•Pollutants•Price of Steel•Employment•Average Wage•Current Regulation•MPC•MSC•MEC•Total External Cost
Pollution Control Choices
• Issue Permits• Set a Tax
Negative Externalities ModuleResults of
Pollution Control
• Steel Output• Pollutants• Price of Steel• Employment• Average Wage• MPC• MSC• MEC
Macro1 Module
Shows annual and long run simple multiplier
effects of a fiscal or monetary policy. You
get to cure depressions or inflations by
manipulating taxes, government spending,
and the interest rate, and see the results.
Initial Conditions • Consumption• Investment• Government• Real GDP• Unemployment Rate• Inflation Rate• Nominal Interest Rate• Taxes
Macro1 ModuleState of the
Macroeconomy• Inflation• Recession
Annual and Long Run Results• Consumption• Investment• Real GDP• Unemployment Rate• Inflation Rate
Policy Decisions• Government Spending• Taxes• Interest Rate
Drug Wars Module
Shows the benefits and costs associated with
allocating a limited budget. You have $100 billion
to minimize the damage done by drug use. You can
spend the budget on: therapy, law enforcement,
and/or education and see the results.
Drug Wars ModuleInitial Conditions• Property Damage• Lives Lost
Allocate Drug Wars Budget
• Law Enforcement• Education• Therapy
Total Results • Damages• Damage Prevented• (Approval Rating)Set Value of Life
• Drug Users• Non-Users
Marginal Results • Damage prevented by budget category
Banking ModuleShows how the FED uses the required reserve
ratio, the discount rate, and open market
operations to control the money supply. You
can then view the effects of your policy
choices on the balance sheets and profit and
loss statements of “high risk” and “low risk”
banks.
InitialConditions
• Discount Rate• Required
Reserve Rate• Money Supply• Interest Rate• Demand
Deposits
Monetary Policy Tools
• Required Reserve Ratio
• Discount Rate• Open Market
Operations
Policy Results
• Money Supply• Bank Deposits• Interest Rate
Financial Impact to High and Low Risk Bank
• Balance Sheet• Profit and Loss
Banking Module
E-Growth Module
Shows how one or more factors affect a
nation’s economic growth. You set social
and/or economic variables, and review
the results generation-by generation for
six generations.
InitialConditions
• Population• Real GDP• Consumption• Investment• Public Goods
Choice Variables
Social• Age of Marriage• # of Children• R&D
Economic• Investment• Public Goods
Results by Generation
• Population• Population Growth• Real GDP• Real per Capita GDP • Consumption• Real per Capita Consumption• Real Value of Capital Stock
E-Growth Module
Macro2 Module
Shows yearly, simple multiplier results from
fiscal and/or monetary policies. You get to
cure recessions and inflations by manipulating
taxes, government spending and the money
supply, and see the yearly results.
Initial Conditions • Consumption• Investment• Government• Net Exports• Real GDP• Unemployment Rate• Inflation Rate• New Price• Nominal Interest Rate• Real Interest Rate
Macro2 ModuleState of the
Macroeconomy• Inflation• Recession
Yearly Results • Consumption• Investment• Net Exports• Real GDP• Unemployment Rate• Inflation Rate• New Price• Nominal Interest Rate• Real Interest Rate• Performance over Time• Aggregate Supply• Aggregate Demand
Policy Decisions• Government Spending• Taxes• Money Supply
Macro3 Module
Shows how an open-macroeconomy works. You
set fiscal and monetary policies to cure
recessions or inflations and see the yearly
results. Long run adjustments in prices and
wages, and supply and demand shocks are also
included.
Initial Conditions • Government Spending• Taxes• Money Supply• Real GDP• Consumption• Investment• Net Exports• Inflation Rate• Price Level• Wage Level• Unemployment Rate• Exchange Rate• Real Interest Rate
Macro3 ModuleState of the
Macroeconomy• Inflation• Recession
Short and Long Run Results • Real GDP• Consumption• Investment• Net Exports• Unemployment Rate• Inflation Rate• Price Level• Wage Level• Real Interest Rate• Exchange Rate
Policy Decisions• Government Spending• Taxes• Money Supply
Exchange$ Module
Shows how the foreign exchange market
works. You change domestic or foreign
supply or demand factors and observe the
effects on market equilibrium. You may also
regulate the market by changing a fixed
exchange rate and see the results.
Initial ConditionsDomestic• GDP• Price Index• Interest Rate• Political Stability Index
Foreign• GDP• Price Index• Interest Rate• Political Stability Index
Initial Equilibrium
• Price• Quantity
Regulate Market Control Price
• Above Equilibrium• Below Equilibrium
Exchange$ Module
Disturb MarketForeign or Domestic• Real GDP• Price Index• Interest Rate• Political Stability Index
Results• New Equilibrium Price and Quantity
Results• With Regulation• Without Regulation
$Distribution ModuleShows the distribution of income in a society
and how that distribution can be affected by
a number of variables. You can also alter
the distribution of income by changing
government policies and by introducing non-
governmental disturbances.
$Distribution Module
Initial Conditions
•Distribution of Income by Family
•Quintile Distribution
Change the Distribution
•Economic Disturbance
•Policy Disturbance
Output Results
•Distribution of Income by Family
•Quintile Distribution
SimEcon® Usage Recommendations
• Small classes - open format, essay
• Medium classes - mixed format, essay
• Large classes - templates, short
answer
SimEcon® Assessment Methods
• Student Surveys
• Instructor Reviews and Surveys
• Paired Class Comparisons
• Paired Topic Comparisons