Students' Guide - Using the Virtual Economy for A-level Business Studies

The main use of the Virtual Economy for A-level Business Studies is likely to be for the external environment or business context section of your syllabus. The model (4th floor) can be used on its own to see the impact of different policies on the economy. You could try different policies and see the effects they have on the economy and people. However, you may want to focus this work a little more. To do this the most useful section will be the case studies section. There are three main case studies:

1. People
2. Business
3. Government

Each case study has three sections to it. The first section sets up a series of scenarios: different types of firm, different families or different governments. The second section then suggests different policies, which could be tried out on the Virtual Economy. Having chosen a scenario and a policy students should, then go on to the report / issues section that considers the effects of the policies on their family / business / government.

The Virtual Economy model could also be used for other areas of the syllabus as well. It could be used when considering marketing. You could look at the impact that government policies are likely to have on the demand for a firm's product and consider what they could do to counter the effects. You could look also at the nature of the product (the price and income elasticities) and how different products will be affected in different ways. There is a considerable amount on this in the business case study.

You could also use it when considering motivation. The model could be used to carry out experiments with different tax policies (both direct and indirect taxes) so that you could consider the effects of these policies on people's motivation to work.

The Virtual Economy may be particularly useful for project work as well. If your project covers one of the areas we've mentioned above why not use the model to do some testing and see the effects on the economy. This may give you data to help you with the project.