Economics 359M

Peter J. Wilcoxen
Department of Economics
University of Texas at Austin

Exercise 2

Due Tuesday 1/30

Play the monopoly simulation game
Macrosoft and write up a short description of the method you used to determine the profit maximizing price and quantity of output. You'll be graded on your method rather than the answer itself.

To get the most out of this exercise,
try to imagine you're playing for real money. If you think through the economics of the problem first, you'll be able to get to the right solution very quickly (in three or four turns). In the real world, that would make you a huge success and get you a big raise and a promotion. It's also possible to solve the problem using trial and error but unless you're very lucky that will take much longer. In a real firm, people who take that approach are considered incompetent and quickly replaced.

You can play the game from any computer as long as the web browser you are using supports the Java language.

Key Concepts