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There are few things that I find more annoying than searching for answers and finding more questions, excepting perhaps Kenny G, and as a newbie, I was profoundly confused by the economics of eRepublik. I mean, really, for a game (or simulation, however you approach to the community) with only five consumer products based on five raw materials, the economics are really pretty convoluted. Add taxes, human resources, and the money market in to the mix and things get very twisted.

So, before I get into things like standard deviation, outliers and the dynamics of the international market, I thought it might be helpful to get back to the basics as a foundation for some headier numbers geek talk. Hopefully, for those of you that do not have the time or the desire to pore through economics and statistics classes this will be helpful to you.

So let me finish burning this pile of Kenny G LPs and get into some basics. Oooh, warms the heart it does…fiiiirrrre…

Well enough of that.

Simple Conversions

Let’s first start out with which Raw Materials are converted into which Manufactured Goods:

Grain is converted into Food.

Diamonds are converted into Gifts.

Iron is converted into Weapons.

Oil is converted into Moving Tickets.

Wood is converted into Houses.

Conversion rates:

It takes 1 “Q” unit of Grain to produce 1 ”Q” unit of Food.

It takes 2 “Q” units of Diamonds to produce 1 “Q” unit of Gift.

It takes 5 “Q” units of Iron to produce 1 “Q” unit of Weapon.

It takes 10 “Q” units of Oil to produce 1 “Q” unit of Moving Ticket.

It takes 200 “Q” units of Wood to produce 1 “Q” unit of House.

Simple Conversion Economics

For simplicity sake we will plug in the cost of $1.00 for 1 “Q” unit of all Raw Materials, therefore, for conversion only, the intrinsic cost of the manufactured goods is:

Q1 Food = $1.00

Q1 Gift = $2.00

Q1 Weapon = $5.00

Q1 Moving Ticket = $10.00

Q1 House = $200.00

Beyond Materials (The Simple Wage Cost of Conversion)

Production of units of Raw Materials depends upon the productivity of the region in which the Raw Material company is located, and the skill and wellness of the worker. This handy dandy calculator (provided by “Equality 7-2521”) can be use😛

http://eusforum.com/index.php?action=dlattach;topic=730.0;attach=192

For example: A Q1 Grain Company located in a Medium region hires a worker with a skill level of 1.0 in Land and 50 wellness; each day the worker, if they work, will generate 1.5 units of grain. If the company is in a High region, the same worker will generate 3.0 units of grain per day. And finally, if the company is in a Low region, the worker will generate 0.15 units of grain per day.

Now, it is interesting to note that production is not linear when it comes to quality levels, but we will get to that in the next installment.

So, our worker in the Q1 Grain Company in a medium region works for 6 days, each day generating 1.5 units of Q1 Grain for a total of 9 units of Q1 Grain. The actual cost of that Grain to produce is whatever the daily wage of the worker, which I am setting at $2.00/day, is multiplied by the days worked and then divided by the number of units. So for our example, the cost is $12.00 (6 days wages * $2.00) divided by the number of units produced, 9, which means that the cost per unit is $1.34 USD (rounded up).

Okay, so the General Manager of the Q1 Grain Company adds the 9 units of Q1 Grain to the market for cost $1.34 (taxes do not come into play until later in the course).

Now along comes the General Manager of a Q3 Food manufacturing company with 1 worker with a skill level of 1 in Manufacturing and 50 Wellness, the GM purchases the 9 units of Q1 Grain and for the next three days the worker I the Q Food company (being paid $3.00/day) generates 1 Q3 Food per day for a total of 3 Q3 Foods out of 9 units of Q1 Grain.

Now, the cost of raw materials was $12.00, the cost of manufacturing (the workers wage of $3.00 * 3 Days) is $9.00. The total cost to produce for the manufacturer was $21.00 for three Q3 Foods, or $7.00 per unit of Food.

So it takes 9 units of Q1 Grain to manufacture 3 units of Q3 Food. Note the linearity of the units of raw materials to generate the units of manufactured goods, so for simplicity sake it is best to view the “Q” stars for these purposes as individual units, wherein 20 units of Q5 Grain for all intensive purposes the same as 100 units of Q1 Grain (5 * 20), from either purchase the output could be 100
Q1 Food.

Got all that? Good, because this is where it starts getting a little hairy – Next Installment: Price Deviation and Standard Deviation