Part of the syllabus: Microeconomics
Date of the article: 2016-05
Link to article: —
This time – no article. Simply use Google News “Cauliflower Prices” or “Cauliflower Demand” or anything else related to Cauliflower. Recently, supply took a dive after recent droughts and/or colds around the world. Demand surged following Paleo and other low-carb diets. This is a great economic phenomenon to discuss in your Microeconomics IA!
Possible talking points:
- Obviously – Supply and Demand diagram showing growing demand and falling supply. Explain why do curves shift, contractions/extensions of supply/demand and the changes in price and quantity.
- Since this would be a microeconomics ia article, consider talking about how higher price of cauliflower affects people’s spending patterns:
- Would they buy more of cauliflower? See “giffen” good on Wikipedia – an interesting thought-provoking idea that we might actually start buying more of a certain good when its price increases.
- Would people substitute cauliflower for other goods? Is it easy to substitute? If they did, the demand for other vegetables would increase as well, leading to possible price changes. Some articles talk about overall veggie prices going up. Could that be related in any way?
- If people now have to spend more money on cauliflower, their real income shrank, didn’t it? Could they be spending less on something else now? If your income falls, you probably cut on luxuries like restaurants first..?
- Talking about restaurants – they are experiencing “menu costs”. As price of cauliflower has doubled in some locations, restaurants have to keep changing prices on their menus. Others are trying to substitute cauliflower with acorn squash, some are experiencing a loss. This gives you a possibility to talk about cauliflower affecting other businesses: could food providers cut their supply of foods involving the discussed vegetable? What would happen to prices of those dishes?
- In short – see what your article talks about:
- Other veggie prices going up – could it be that people are substituting the expensive cauliflower and are consuming more of other veggies pushing up the demand?
- Effect on businesses – restaurants? Shops? What’s happening in those markets?