SimpleMacroeconomyGameInstructions - ID: _ Overview: We are...

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ID: ____________ Overview: We are going to set up a simple economy. You will be a worker if your ID number above begins with “W”, and you will be a firm if your ID begins with “F”. Each worker now gets 3 black playing cards (Clubs or Spades) and each firm gets 26 red cards (Hearts or Diamonds). Black cards represent goods and services, and red cards represent money. Firms use red card money to purchase labor from workers. The black cards (labor) purchased by firms can be used to produce more black cards (goods) which can either be consumed by the firm or sold to workers for red cards. Regardless of whether you are a worker or a firm, your goal is to accumulate as many black cards as you can. The red cards are necessary, however, in allowing firms to purchase labor and in allowing workers to purchase goods. Production: The first black card purchased by a firm produces 6 black cards (we add 5 to the original). Similarly, we add 4 black cards to the firms’ second black card, 3 to the third black card, 2 to the fourth, 1 to the fifth, and none to the sixth or any additional black card. If the firm purchased 7 black cards, for example, these would be laid out and augmented by (5+4+3+2+1+0+0)=15 cards as I’ll demonstrate. Just as firms have a diminishing marginal product, workers have a diminishing marginal value of leisure (black cards kept). As I’ll demonstrate now, we will add 2 black cards to the first one that a worker keeps, 1 black card to the second one
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This note was uploaded on 09/15/2009 for the course ECON 304 taught by Professor Stone,mistyriano,alejandro during the Fall '07 term at Pennsylvania State University, University Park.

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SimpleMacroeconomyGameInstructions - ID: _ Overview: We are...

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