Tuesday, July 18, 2017

Bacon and Supply/Demand Graphs. What a great breakfast combination.

A nice article to practice graphing Supply and Demand.  

America’s Lust for Bacon Is Pushing Pork Belly Prices to Records


Once considered an unhealthy byproduct, bacon has become a guilty pleasure—with prices to match.

Excerpt for graphing:
""Some analysts say bacon, meanwhile, is becoming a yearlong staple that consumers are eager to procure. That voracious demand has left wholesalers in a squeeze. Retailers “have turned hand-to-mouth, buying only what they need, waiting for production to increase and prices to decline,” said Dennis Smith, a commodities broker at Archer Financial Services in Chicago. 
Pig farmers are struggling to keep up with demand. The national hog herd rose to a seasonal record of 71.7 million head in early June, according to the U.S. Department of Agriculture, up 3% from a year earlier. 
But it hasn’t been enough to satiate bacon demand. Stocks of pork bellies in commercial freezers fell to 31.6 million pounds in May, down 59% from a year earlier and the lowest figure for the month since the USDA began keeping track in the 1950s.""

Friday, July 14, 2017

A 1967 Wrigley Field Menu Board and Inflation.

Found this HERE

It shows a menu board for concessions and game tickets at Wrigley Field in Chicago for the year 1967 (relying on information from the source).

In order to see what these prices are in today's dollars, multiply each number below by 7.43 (using the Bureau of Labor Statistics (BLS) inflation calculator)




Example: An Oscar Mayer Hot Dog cost .30 cents in 1967. If the price of that hot dog simply increased in price at the pace of overall inflation, then it would cost you $2.23 (.30 cents X 7.43) at Wrigley today.

Go to Wrigley today and you will pay about $5.50.  That is a factor increase of 18.33 from 1967, or a 2.5 times (18.33/7.43) increase over stated inflation.

There are lots of comparatives you can do with this menu board over a broad range of goods shown here.  A nice way to help students understand the effects of inflation.



Wednesday, July 12, 2017

Tax Policy and the 1%. A nice illustrative video!

Here is an excellent video from the Wall Street Journal, with a simple illustration, of the tax share of the different quintiles (20% blocks) of US taxpayers and extends it to the top 1%.

It is a nice introduction for high school students to the progressive income tax structure and a discussion on income (as opposed to "wealth") inequality.

Wednesday, January 25, 2017

Healthcare Spending Graph. Easy to see the problem but how it "fix it"?

Here is a graphic regarding healthcare spending in the US I think is important but rarely talked about.

It is very clear that a small number of people relative to the whole population are responsible for a disproportionate share of heath care dollars. This from the JAMA article that contains the graph:
"...The core of the answer to this question can be read in the chart below, showing the highly skewed distribution of per capita health spending across the US population. The phenomenon is known as the “80-20 rule,” indicating that 20% of any large insured populations tends to account for 80% of all health care spending on that population...."

Health spending is highly concentrated among the highest spenders.

The cited paragraph seems to understate that data presented in the graph, but the point is well taken.

Why do we not discuss a "Marshal Plan" to address the needs of the few that cost us the most?

Rhetorical question, I guess.

The article is about why insurers are abandoning the ACA Exchanges.  It is written in layman's language enough that I think it would be a good read for students.

Monday, January 2, 2017

The Market for Bison Meat and a basic Demand and Supply Model. Fun times graphing!

Here is an excellent article that allows us to practice a "simultaneous shift" in our Demand and Supply Curves in our basic Market Model.

That Bison Burger Just Got Pricier Thanks to Canada Ranchers
""Bison prices have been rallying as demand for the niche product is rising among U.S. consumers amid a favorable exchange rate and as more people seek out organic foods and healthy alternative proteins. The grass-fed meat has fewer calories, less cholesterol and fat than beef, and the animals are raised without hormones or antibiotics.""
A nice description of factors that affect the Demand for a good or service: a "change is consumer tastes/preferences" and "change in number of consumers" with a dab of foreign exchange effect thrown in (US dollar stronger than Canadian dollar).

Using a basic Market Model from a starting equilibrium we can see that the Demand for Bison Meat increases as more consumers choose to, well, consume bison meat.  At each and every price, the Quantity Demanded for Bison meat is greater than is was before.

The Demand Curve shifts RIGHT.

Here is the tricky part in trying to relate this to "real life".  If we stopped right now, it appears that at the new equilibrium "B" that the Quantity Supplied is now greater than it was before (Q1 rather than Qe--we move up and along the Supply Curve) In this case it is an "illusion" because we have a simultaneous change in Supply as described here:
""As demand gains, Canada’s ranchers are becoming more reluctant to send animals to slaughter, and instead are holding them back in favor of herd expansion. As a result, fewer bison are being exported for processing in the U.S., Canada’s biggest market, and domestic production probably fell 25 percent in 2016 from a year earlier to 10,500 animals, Kremeniuk said.""

The assumption is that at "every price the Quantity Supplied is less" than it was before, by about 25%.

The Market Supply Curve for Bison shifts to the LEFT indicating a DECREASE in Supply ("S1").

We have to be mindful that the Quantity Supplied, hence our Market quantity, will be LESS than it was before at "Qe".
The new "final" equilibrium Price  is "P2" at a Market quantity of "Q2" at Point "C"

Let's clean that up a bit:


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