Economic Model - 4

In the simple model I described earlier, the economic model is limited by the fact that once a farmer gets a massage, the farmer has to wait for the masseuse to buy a bushel of wheat before he can pay for another massage. I also arbitrarily said that one massage is equivalent to 1 bushel of wheat = 10 cents. The market may set different rates. How does a market set different rates? based on supply and demand. In this model, say a farmer decides that one massage for 1 bushel is too little and so demands more massages. The farmer may demand 2 massages for 1 bushel - the masseuse has to eat food to survive but the farmer could survive without a massage though he would like to have a massage. So the farmer only pays 5 cents for a massage now and the masseuse has to give 2 massages before he can get his bushel of wheat. What if the farmer demands 5 massages for 1 bushel of wheat - the masseuse may have to overwork so much that he would decide to leave this line of work and become a farmer himself. Either that or he must keep improving the massage experience every year to keep the farmers craving for the massages. This always happens in the service industry - people want some better experience to keep buying next year. Today's ipod becomes boring next year and apple has to keep offering some other addition to the ipod to keep luring the existing customers (and also lure new customers who weren't impressed with last year's ipod). In this example, the price of wheat or massage would be set up based on supply/demand. To keep his well being, the farmers may need to get some minimum massages every year and so there will be some masseuses around after some of them get out of the business. The minimum massage could be 5 massages per year. So there must be enough masseuses to provide 10*5 massages every year to the farmers. I will explore next a 3 entity model - that gets more interesting than the two entity model and will bring about a lot of revelations about the workings of our modern economy. I would also need to introduce some credit infusion function into the economy by the banks.