Unit Two Review

14 06 2011

Topics Covered (lots and lots of material here!)

  • Supply and Demand
  • Elasticity
  • Marginal Utility
  • Revenue, Costs and Profit
  • Marginal Revenue and Marginal Cost
  • Market Structures

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Coffee Prices and Supply

10 03 2011

Colombia’s Coffee Crisis

Room for Debate Discussion

Considering the elasticity of the supply and demand of coffee, model the current situation.

Cotton in demand and in short supply

6 03 2011

Link: http://www.danielstrading.com/resources/news/Futures-Market-News/Cotton-futures-gain-as-demand-trumps-supply_800444119/

The price has increased because of the decrease of supply and the increase of demand. The article mentions that the Chinese production companies that produce cotton had a shortage by 6%. A supply determinant could be the lack of resources to make cotton which increase the cost of production and causes the supply to decrease. A demand determinant could be the buyer’s expectations. Because of the low supply, buyers would wan’t to stock up on cotton, before the price increases. The decrease of supply and the increase of demand has caused to price to increase and the quantity to decrease.

Coffee Prices on the Rise

5 03 2011

Ah yes, the morning drink. Only recently have I discovered how wonderful it truly is. And as of late, prices have been soaring and it isn’t just because of the spring tradition of Roll up the Rim to Win. The price of Arabica coffee, alone, has increased 48% within the last few months.

Authorities on the issue say that there are two reasons for this. First of all is the ever increasing demand for coffee, especially of high-quality. The global population is in a growth trend so therefore more coffee drinkers (number of buyers), and more members of developing markets (ex. China, India, Brazil) are starting to desire this good. Secondly, supply of coffee has decreased due to poor harvests. The world’s greatest producer of coffee is already forecasting low yields of low quality beans. This has to do with the number of sellers, or in this case the farmers that were able to produce proper yields within this year. Since less producers where able to rack in their typical yields of coffee, the supply has decreased. Both these factors contributed to a higher equilibrium price and the change in quantity which is slightly ambiguous.

As a result, the price of purchasing a nice warm cup of Joe has gone up globally.

Article: http://online.wsj.com/article/SB10001424052748703559604576174841918967636.html

The Business of Fashion: Clothing Prices on the Rise

5 03 2011


The price of cotton has more than doubled in cost over the last year, and as a result many fashion retailers are forced to charge customers a higher price for clothing. This rise in the cost of cotton is caused by both a decrease in supply and an increase in demand. The supply of cotton has decreased as a result of the cost of factors of production, because the costs of manufacturing and labour in countries such as China and India are increasing. Also, the number of sellers has decreased because floods in Pakistan and heavy rains in China slowed production, and so fewer cotton farmers were able to cultivate the land and sell their cotton. The cotton market is experiencing an increase in demand from developing countries, and this is likely because of the increasing number of buyers, though the reason is unclear in the article. The result of a decrease in supply of and an increase in demand for cotton has caused an increase in its equilibrium price; however the quantity of cotton exchanged between sellers and buyers is unclear in the article.

Supply and Demand Assignment

4 03 2011

Supply and Demand Blog post

Find an article online illustrating a change in equilibrium price or quantity in some market.  It doesn’t matter what product is involved, but you should avoid advertisements (they generally don’t contain enough useful information) and don’t look at the stock market or commodity market unless you have a very good understanding of finance.  A good place to start is Google news.

Link to the article from your post.

Explain why the price and/or quantity changed.  Refer to any supply or demand determinants that changed and/or quantity supplied or demanded.

Graph the market. Create and upload your supply and demand graph.  Make sure it is properly labeled. You can use any program you’d like.  One option is googledocs which has a paint program.

Include the Unit Two and Assignment categories for the post and use appropriate tags (i.e. what is the market in your article).

Due by the beginning of class on Monday.

Supply and Demand Assignment

3 03 2011

Rising Cocoa Prices May Leave Chocolate Fans Bitter

The price of the cocoa is rising because Ivory Coast, a West African country that produces 40% of the world’s cocoa beans is currently in a political unrest with a ban on cocoa bean exportation to the global market. This ban dramatically decreased the quantity of cocoa supply available globally and brought an increase to its price. Another factor that caused the rise of cocoa bean price is the increasing demand of cocoa bean from the global market, especially from highly populated countries such as China and India. Therefore, while the demand for cocoa is continuously rising, the supply of cocoa bean is considerably decreasing, which result in a high equilibrium market price for cocoa bean.

Supply and Demand Determinants

2 03 2011

Diagram the following situations.