®
SimEcon
Economic Issues and Principles
Dismal Science Software®
Goals of SimEcon®
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Develop an interactive instructional tool
Add value to economic education
Improve student learning
Attract students to economics
Increase instructional access
SimEcon® Modules
Basic Micro Models
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Markets
Competition
Monopoly
Labor
Advanced Micro Models
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UtilityMax
CostMin
GasStations
Externalities
Basic Macro Models
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Macro1
DrugWars
Banking
E-Growth
Advanced Macro Models
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Macro2
Macro3
Exchange$
$Distribution
SimEcon® Design and Operation
• 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® 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.
Markets Module
Initial
Conditions
Initial
Equilibrium
Demand
• Income
• Butter Price
• Corn Price
• Price
• Quantity
Supply
• Rainfall
• # of Farms
• Seed Cost
Regulate Market
Disturb Market
Control Price
• Price Ceiling
• Price Floor
Control Production
• 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.
Competition Module
Short Run Costs
• Marginal Cost
• Average Cost
Set Firm Output
• Current Market Price Provided
• Set Output Level
Firm Results
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Price
Costs
Profit Margin
Total Profit
Equity
Expert Analysis
• Evaluation of Output Decision
Monopoly Module
Shows 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.
Monopoly Module
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
Regulate
Monopoly
Results of
Regulation for
• Number of Firms
• Price
Pure Monopoly Pricing
Average Cost Pricing
Marginal Cost Pricing
Output Results
• New Equilibrium
• Price and Quantity
• Total Cost
• Average Cost
• Price
• Industry Output
• Profit
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.
Labor Module
Initial
Conditions
Initial
Equilibrium
Demand
• Price of Bread
• Oven Cost
• Price of Flour
• Price
• Quantity
Supply
• Population
• Participation Rate
• Cook’s Wage Rate
Discriminate
Control discrimination
among Pildians
Disturb Market
• Demand
• Supply
Results
• New Equilibrium
Price and Quantity
• Big Pildians
• Little Pildians
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.
UtilityMax Module
Initial Conditions
• Price of Beer
• Price of CDs
• Consumer’s Income
Consumer Results
Set Preferences
Select Quantities
• Preference A
• Preference B
• Beer
• CDs
Change Budget
New Consumer Results
• Total Utility
• Price of Beer
• Marginal Rate of
• Price of CDs
Substitution
• Consumer’s Income
• Maximum Possible Utility
• 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
Production
Results
•Output
•Total Cost
•Average Cost
•Marginal Costs
•Marginal Products
•MRS
Graphs
•Isocost /
Isoquant
•Long Run
Average Cost /
Marginal Cost
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.
GasStations Module
Initial Conditions
• Rent at Location 1
• Rent at Location 2
• Current Price of Gas
Operation Results
• Gallons Sold
• Total Revenue
• Total Cost
• Station Rent Increase
Set Preferences
Select Gas Price
• Location 1 or 2
Change Location
Executive Summary
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Months in Operation
Total Profits
Total Gallons Sold
Average $/Gallon
Externalities Module
Shows 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.
Positive Externalities Module
Initial Conditions
Choices
• Government Spending
• Social Net Benefits Lost
• # of Flu Shots
• Price of a Flu Shot
• MSB of a Flu Shot
• MPC of a Flu Shot
• Development Cost
• Market Structure
• Subsidy Type
Results of Market
Choices
• Vaccine Price
• Marginal Private Cost
• # Vaccinated
• MSB
• MSC
• Total Profit
• Total Social Net Benefits
Negative Externalities Module
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
Results 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.
Macro1 Module
Initial Conditions
• Consumption
• Investment
• Government
• Real GDP
• Unemployment Rate
• Inflation Rate
• Nominal Interest Rate
• Taxes
State of the
Macroeconomy
• Inflation
• Recession
Policy Decisions
• Government Spending
• Taxes
• Interest Rate
Annual and
Long Run Results
• Consumption
• Investment
• Real GDP
• Unemployment Rate
• Inflation 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 Module
Initial Conditions
• Property Damage
• Lives Lost
Set Value of Life
• Drug Users
• Non-Users
Total Results
Allocate Drug
Wars Budget
• Law Enforcement
• Education
• Therapy
• Damages
• Damage Prevented
• (Approval Rating)
Marginal Results
• Damage prevented by
budget category
Banking Module
Shows 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.
Banking Module
Initial
Conditions
Monetary
Policy Tools
• Discount Rate
• Required
Reserve Rate
• Money Supply
• Interest Rate
• Demand
Deposits
• 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
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.
E-Growth Module
Initial
Conditions
Choice
Variables
• Population
• Real GDP
• Consumption
• Investment
• Public Goods
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
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.
Macro2 Module
Initial Conditions
• Consumption
• Investment
• Government
• Net Exports
• Real GDP
• Unemployment Rate
• Inflation Rate
• New Price
• Nominal Interest Rate
• Real Interest Rate
State of the
Macroeconomy
• Inflation
• Recession
Policy Decisions
• Government Spending
• Taxes
• Money Supply
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
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.
Macro3 Module
Initial Conditions
State of the
Short and Long Run Results
Macroeconomy • Real GDP
• Government Spending
• Taxes
• Inflation
• Money Supply
• Recession
• Real GDP
• Consumption
• Investment
• Net Exports
Policy Decisions
• Inflation Rate
• Price Level
• Government Spending
• Wage Level
• Taxes
• Unemployment Rate
• Money Supply
• Exchange Rate
• Real Interest Rate
• Consumption
• Investment
• Net Exports
• Unemployment Rate
• Inflation Rate
• Price Level
• Wage Level
• Real Interest Rate
• Exchange Rate
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.
Exchange$ Module
Initial
Conditions
Initial
Equilibrium
Domestic
• GDP
• Price Index
• Interest Rate
• Political Stability Index
• Price
• Quantity
Foreign
• GDP
• Price Index
• Interest Rate
• Political Stability Index
Regulate Market
Disturb Market
Foreign or Domestic
• Real GDP
• Price Index
• Interest Rate
• Political Stability Index
Results
• New Equilibrium
Price and Quantity
Control Price
• Above Equilibrium
• Below Equilibrium
Results
• With Regulation
• Without Regulation
$Distribution Module
Shows 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