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Supply, demand, elasticity, costs and choices: the core of Econ 101.
13 entries
1770s–1920s
Thinkers explain prices, trade and competition, while the telegraph and the ticker speed markets up.
Adam Smith described a pin factory where ten workers, each doing one step, made about 48,000 pins a day, far more than they could alone. He argued that prices set by competition guide people to produce what others want.
💡 Why it made sense then
Trade and industry were growing fast, and people wanted to understand what made some nations richer than others.
Ideas it gave us
Economies of scale are the cost savings a business gets as it grows: the average cost of each unit falls as it produces more.
🎮 The game has no firms, but you can see the opposite on a curve: the more you buy at once, the higher your average price.
Open the full entry →Supply and demand is the model that explains prices: when more people want something than is available, its price rises; when more is available than people want, its price falls.
🎮 Every Journey Shares price is set by supply and demand through a bonding curve: buying raises the price and selling lowers it.
Open the full entry →Perfect competition is a market with many sellers of an identical product, free entry and exit, and full information, so no one firm can set the price. Every firm is a price taker.
🎮 The game's curves make every player a price taker: no one sets the price, and anyone can trade at the quote.
Open the full entry →In 1815, during debates over the Corn Laws, Thomas Malthus, David Ricardo, Edward West and Robert Torrens all set out the law of diminishing returns: adding more labour to the same land adds less and less grain.
💡 Why it made sense then
A growing population had to be fed from limited farmland, so how much more food extra work would bring was an urgent question.
Ideas it gave us
Diminishing returns means that adding more of one input, while others stay fixed, eventually adds less and less output. A tenth worker in a small kitchen adds less than the second.
🎮 The farm co-op limits how many plots you can own, and bigger orders on a listing's curve get less per dollar, both showing diminishing returns.
Open the full entry →In his 1817 book, David Ricardo showed that even if Portugal made both cloth and wine more cheaply than England, both countries gain if each makes what it gives up least to produce, and they trade.
💡 Why it made sense then
Britain was arguing over free trade, and Ricardo showed trade helps both sides even when one is better at everything.
Ideas it gave us
Comparative advantage is the ability to produce something at a lower opportunity cost than someone else. Trade makes both sides better off when each specialises in what they give up least to make.
🎮 Hiring a bot you've beaten is a small lesson in trade: it trades while you do other things, and you split the result.
Open the full entry →Jules Dupuit, a French engineer, asked how much a public bridge was worth to its users. He saw that many would pay more than the toll, and that a high toll stopped some crossings that were worth making, a loss nobody gains.
💡 Why it made sense then
The French state was building roads, canals and bridges and needed a way to judge them and set tolls.
Ideas it gave us
Consumer surplus is the difference between what buyers would be willing to pay and what they actually pay. Producer surplus is the difference between what sellers receive and the lowest price they'd accept.
🎮 When you'd happily pay more for store gear than its price, the difference is your consumer surplus.
Open the full entry →Deadweight loss is the value lost to society when a market produces less (or more) than the efficient quantity, often because of a tax, price control or monopoly. It's surplus that no one gets.
🎮 The game's 7.53% sales tax on store items creates a small deadweight loss: some purchases that would just be worth it without the tax don't happen.
Open the full entry →In 1871 William Stanley Jevons and Carl Menger, and in 1874 Léon Walras, each argued that value comes from the satisfaction of one more unit, which falls as you have more. Walras also described how all markets settle into balance together.
💡 Why it made sense then
It solved an old puzzle: why water, essential to life, is cheap while diamonds are expensive.
Ideas it gave us
Marginal utility is the extra satisfaction from one more unit of something. It usually falls with each unit, which is called diminishing marginal utility.
🎮 Store gear shows diminishing marginal utility: the first car or pet is fun, the fifth adds much less.
Open the full entry →Marginal cost is the cost of producing one more unit. Firms maximise profit by producing until marginal cost equals marginal revenue.
🎮 When you buy on a bonding curve, the marginal cost of each extra share rises, which is why the last share in a big order costs more than the first.
Open the full entry →Market equilibrium is the price at which the quantity buyers want equals the quantity sellers offer, so there's no shortage or surplus.
🎮 On a bonding curve the price settles wherever buying and selling balance out: when nobody wants to buy or sell at the current price, it stops moving.
Open the full entry →Alfred Marshall's Principles of Economics (1890) showed price set where supply and demand meet, like the two blades of scissors, and measured how sensitive demand is to price: elasticity.
💡 Why it made sense then
Economics was becoming a university subject, and it needed clear tools to explain everyday prices.
Ideas it gave us
Supply and demand is the model that explains prices: when more people want something than is available, its price rises; when more is available than people want, its price falls.
🎮 Every Journey Shares price is set by supply and demand through a bonding curve: buying raises the price and selling lowers it.
Open the full entry →Price elasticity of demand measures how much the quantity people buy changes when the price changes. Demand is elastic if quantity changes by a bigger percentage than price, and inelastic if it changes by less.
🎮 Store prices in the city are fixed, but you can see elasticity in how players respond: a small price change on some listings brings a rush of trades, while others barely react.
Open the full entry →Market equilibrium is the price at which the quantity buyers want equals the quantity sellers offer, so there's no shortage or surplus.
🎮 On a bonding curve the price settles wherever buying and selling balance out: when nobody wants to buy or sell at the current price, it stops moving.
Open the full entry →Austrian economist Friedrich von Wieser argued that the true cost of using something is the value of the best other use it had, an idea soon called opportunity cost.
💡 Why it made sense then
It explained costs even where no money changes hands, like the time you spend.
Ideas it gave us
Opportunity cost is the value of the best alternative you give up when you make a choice. The real cost of anything is what you could have had instead.
🎮 Uninvested cash in the game slowly loses value to inflation, which makes its opportunity cost visible.
Open the full entry →1950s–1990s
Risk gets measured, options get a formula, and index funds and ETFs bring the whole market to everyone.
On 15 August 1971, President Nixon stopped converting dollars into gold for foreign governments and ordered a 90-day freeze on wages and prices.
Price controls brought shortages over the next few years, and the dollar became a currency backed by trust rather than gold.
💡 Why it made sense then
The US was running low on gold and inflation was rising, and the government wanted quick action.
Ideas it gave us
A price ceiling is a legal maximum price, like rent control; a price floor is a legal minimum, like a minimum wage. A binding ceiling causes shortages and a binding floor causes surpluses.
🎮 The game has no price controls: every price floats freely on its curve.
Open the full entry →The money supply is the total amount of money in an economy. M1 counts cash and checking deposits; M2 adds savings and other near-money.
🎮 New play money enters the game through signup and daily bonuses, rewards and bailouts. The treasury page shows how much has been printed for bailouts.
Open the full entry →In 1985 Hal Arkes and Catherine Blumer showed in experiments that people stick with a choice because of what they've already spent, even when it no longer makes sense.
💡 Why it made sense then
Economics said past costs shouldn't matter; psychology showed they often do.
Ideas it gave us
A sunk cost is money or effort already spent that can't be recovered. The sunk cost fallacy is letting it drive future decisions, which should depend only on future costs and benefits.
🎮 Farm plots in the city sell back for 90% of what you paid; that 10% is a sunk cost. It shouldn't decide whether you keep the plot.
Open the full entry →🎮 Practise with $10,000 in play money
Try it in a live 3D city with play money: trade shares in real public figures, get margin-called, pay your taxes and rob a bot or two. Free, and nothing real is at stake.
For learning only. This isn't financial advice.
