Students definitely will respond to being paid to come to class, not to mention having the opportunity to make money in other ways or even to win a prize at the end of the simulation. Voluntary exchange, both domestic and international, is a win-win situation for the traders. This simulation gives students the opportunity to conduct exchanges, transactions all on a voluntary basis. We know as rational individuals, that they would not enter into an exchange unless they anticipated a gain. In a market economy, prices identify how scarce one good or service is compared to other goods and services.
Prices determine who gets what goods and services.
Prices are determined by supply and demand. In a market economy, profit is the incentive for entrepreneurs, competition is the regulator. An economy s performance is measured by changes in such economic indicators as Real Gross Domestic Product, employment and unemployment, and the price level. Government influences the economy in both a macro and a micro sense.