Use the four-step process
to explain what happens to PRICE (P) and QUANTITY (Q) of
the following goods using the information provided in the
short news articles below.
Four Step
Process
1. Which determinant
has changed?
2. Will it affect Supply (S) or Demand (D)?
3. Will S or D increase or decrease?
4. GRAPH IT and show what happens to P and
Q.
Non--Price Determinants of
Demand (PPINT)
Pe -- expected
price
Pog -- price of other goods (subs and Complw)
I - income (normal and inferior goods)
N -- number of POTENTIAL consumers
T -- tastes and preferences
Non-Price Determinants of
Supply (PPPTTN)
Pe -- expected
price
Pog -- price of other goods PRODUCED. BY THE SAME
FIRM
Pres -- price of resources
T - technology of production
T -- taxes and subsidies
N -- number of sellers
Product: Beef. What
happens to P and Q? Circle and label determinants. Show
effects on a graph.
http://www.bloomberg.com/news/articles/2014-11-18/us-beef-supply-will-fall-again-in-2015-chicken-demand-will-rise
Domestic beef
production has been waning [decreasing] for
years because of rising feed and energy prices. A
drought in 2012 caused feed prices to spike and, in
response, farmers thinned their herds.
Product: Chicken.
What happens to P and Q? Circle and label determinants.
Show effects on a graph.
http://www.bloomberg.com/news/articles/2014-11-18/us-beef-supply-will-fall-again-in-2015-chicken-demand-will-rise
It's been an expensive
year to eat beef, and 2015 doesn't look any cheaper. .
. . Consumers have traded down to less expensive meats
such as chicken.
Product: Almonds.
What happens to P and Q? Circle and label determinants.
Show effects on a graph.
http://www.cnbc.com/2016/08/29/california-almond-harvest-may-break-records-despite-drought.html
With the drought
easing in parts of California, this year's almond
harvest is shaping up to be a record haul ….
Consumers have already taken an interest in almond
products because of their "heart health"
benefits.
Product: McDonald's
meals. What happens to P and Q? Circle and label
determinants. Show effects on a graph.
http://www.bloomberg.com/news/articles/2014-10-20/mcdonald-s-costly-burgers-send-diners-to-fancier-rivals
Mike Hiner used to
take his grandsons to McDonald's when they wanted a
treat. With higher wage and food costs pushing up
prices at the Golden Arches, he's increasingly taking
them to IHOP, Denny's and Chili's instead . . . . The
chain's diminishing appeal among budget diners --
coupled with rising meat costs -- are projected to
take a bite out of third-quarter earnings due to be
reported tomorrow.
