In: Business and Management

Submitted By AP85
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Goodlife Simulation
The study of economics allows us to understand how governments, employers, and households make decisions given the options and constraints that each of them has. This week we were assigned a scenario that involved decisions that were made by an employer and how those decisions impacted both the employer and individual households (University of Phoenix, n.d.).
Macroeconomic Vs Microeconomic Principals
Macroeconomics and microeconomics are both subcategories of economics. Macroeconomics involves a much broader approach to the economy and it involves decisions that the government makes in trying to regulate the economy. Microeconomics involves the study of how market demand and supply affect the decisions that households and firms make (Difference Between Net, n.d.)
In the scenario that we reviewed, the government made macroeconomic decisions by implementing a price ceiling for rents, also known as a rent control policy. The choices that Goodlife had to make in response to that decision were also macroeconomic because Goodlife had to make a decision to not rent as many apartments, even though it had the capacity to rent more apartments. The government response to that decision would also be macroeconomic.
Goodlife engaged in several microeconomic decisions by adjusting the supply of apartments when needed. In year one, Goodlife made a decision to lower rent prices in order to balance the excess supply with the market demand. Goodlife made another microeconomic decision in year three and five by adjusting their rent prices in order to maximize revenue and profits.

Demand and Supply Shifts A shift in the demand curve occurs when there is a change in demand that is not related to price (Colander, 2010). A shift in the demand curve occurred when a large employer moved into Atlantis and caused an increase in demand for apartments. This…...

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