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Tools · Economics

Kaupvík economics in one fjord town

In Kaupvík, economics opens up. Buyers hold balloons at the height of their willingness to pay, cones stand on pillars at the height of their cost, and the square becomes the graph. Eight places, each with its own model: the market square, the ice-cream stall, the household, the labour market, the town council, the banks, the islands and the national economy.

Start at the market squareOpen Principles of Economics

Places and missions

Eight places in Kaupvík, each with its own model. Choose a place to see its missions.

Map of Kaupvík — The map is a drawing. Everything on it is also in the list.
About Kaupvík

Kaupvík is not one connected economy. Each mission uses its own model. The same people and places appear in many of them, but the numbers do not follow them. When a number travels between missions, you see it on a card marked “Imported assumption” and can trace it back. Fjarðey and Hlýey are imaginary islands, and the numbers describe neither Iceland nor any other real country.

A year in Kaupvík

The year follows the fjord from June to May. Each session is three or four missions, and some values travel between them on labelled cards. You can also open any mission directly.

The year's first version: June to October

  4. In the first version

    July

    The summer job

    1. Mission H.1Make the month work
    2. Mission H.3More hours, more to spend?
    3. Mission H.2Prices rise unevenly

    Values that travel in this session

    • Hourly wage on offer: from One employer or many to More hours, more to spend? (default value)
    • Price of a cone: from The harbour levy to Prices rise unevenly (default value)
  6. In the first version

    October

    A new machine

    1. Mission B.5A new machine
    2. Mission F.1A sale
    3. Mission F.2A loan
    4. Mission F.3A payment elsewhere

    Values that travel in this session

    • Interest rate on a loan: from A loan to A new machine (default value)
    • Loan request for a new machine: from A new machine to A loan
    • Loan request for a new machine: from A new machine to A payment elsewhere
    • Price of a cone: from Meet the market to A sale (default value)
Later in the year

These sessions join the year once their places are part of the campaign. The missions themselves already open directly.

  2. Later

    December and January

    The króna weakens

    1. Mission T.5The króna moves
    2. Mission H.2bThe króna weakens
    3. Mission F.4What counts as output?
    4. Mission F.6Two sides of an international transaction

    Values that travel in this session

    • Change in import prices: from The króna moves to The króna weakens
    • The tomato shipment: from The króna moves to Two sides of an international transaction (default value)
    • One evening's sales and purchases: from Profit that is not a profit to What counts as output? (default value)

How the places connect

Numbers travel between places only on labelled cards, imported assumptions. The place that makes a card owns it, and every place can always use a default value.

The drawing shows the same connections as the list.
  1. Market Town → Run a Business: Price of a cone
  2. Follow the Money → Run a Business: Interest rate on a loan
  3. Trading Islands → Run a Business: World price of ice cream
  4. Market Town → Household Decisions: Price of a cone
  5. Jobs and Opportunity → Household Decisions: Hourly wage on offer
  6. Trading Islands → Household Decisions: Change in import prices
  7. Steer a Small Economy → Household Decisions: Consumer price index
  8. Market Town → The Common Good: Harbour levy revenue
  9. Jobs and Opportunity → The Common Good: Redistribution outcomes
  10. Market Town → Follow the Money: Price of a cone
  11. Run a Business → Follow the Money: Loan request for a new machine
  12. Run a Business → Follow the Money: One evening's sales and purchases
  13. Trading Islands → Follow the Money: The tomato shipment
  14. Market Town → Trading Islands: Demand and supply of ice cream
  15. Trading Islands → Steer a Small Economy: Exchange-rate change

How every mission works

  1. Predict first

    You draw or choose a prediction before anything moves. It is not scored; it is compared with the result.

  2. Choose one thing

    Each step has only a few controls. You change one assumption and see what it does.

  3. See and explain

    The town, the graph, the table and the sentence all show the same model. Then you put the explanation together yourself.

The missions follow the chapters of Principles of Economics and also open directly from the chapters.

A made-up example: these are not real prices.