Exercise 2-2: Economic Games

<><> <><>

I played Diner City and chose the Sushi restaurant against the Burger franchise next door. I really had no clue of what I was doing in the beginning even though I was making revenue. Then I decided to add employees to increase output as I only had seating capacity for 7. This increased the throughput and people were coming in and out fast, however, I had to spend $150 to clean the restaurant after that many patrons. I tried to stay ahead of the burger place as he added upgrades. I added an outside menu board, singers and a paved walkway to the door which all added to increased revenue ahead of the competition. Unfortunately this game automatically ended after day 7 of being in business and produced the attached summary. I am going to try this again or one of the other games. 19-June-2011 Well I tried this game again..... and again ..... and again against the computer driven burger franchise. After failing against the competition time and time again I started to see the connection between scarcity, choice and opportunity cost. My goal was to expand the franchise to the property across the street which was for sale for $3,000. The demand from the consumers seemed relatively equal when compared to my Asian restaurant and the burger franchise, so it all came down to choices of which upgrades to add to the restaurant and at the correct time to increase revenues. I tried the keeping up with the Jones' philosophy of adding the same upgrades as the burger franchise and this would never get me ahead. then I would try different combinations of upgrades and played with the timing of when I implemented them. This provided some advantage over the competition but never seemed to produce sufficient revenue to reach my goal of expansion. After about 15+ tries I did purchase the expansion property on day 13 but it still did not give me any real advantage over the competition and I failed again. I think I will let my kids play and see if they are better entrepreneurs than me.

Exercise 1-2: Possibility Curve

Reference: Figure 1.1, 1.2, 1.3 and 1.4, Chapter 1, Principles of Microeconomics 6/e, Sayre, Morris

1.      What are these graphs representing?

·     The four figures represent various forms of the production possibilities curve which is a visual graphical representation showing various theoretical combinations of output that may be produced by adjusting the factors of production (land, labor, capital and entrepreneurship).

2.      What do they depict about scarcity, opportunity costs, and choice?

·     Scarcity: is a limited amount of something, be it time, money or a resource.

·     Choice: scarcity leads to choice regarding the most efficient path.

·     Cost Opportunity: is the value of the best alternative given up as a result of the choice made.

3.      What are some choices you have to make based on scarcity and choices in your life? Think about your income, time, assets, etc.

·     For me the greatest scarcity is time as I must allocate it in order to encompass online education, work, family and my kids spontaneous issues that arise. Therefore in order to accomplish all of this there are times when sleep is sacrificed for studies, which in turn may have a detriment on my other commitments if continued for a prolonged period.

4.      What was one significant opportunity cost you experienced by returning to school?

·     I am fortunate in that my part time studies did not require me to give something up as the company I am working for is paying the tuition. Other than my time to conduct the course as noted prior I have not had to sacrifice income or realign other budgeted items for education.